Some lender rules are changing this week. What do you need to prepare as a buyer to keep things moving smoothly to close? I asked a trusted lender to compile some information on what to expect and what to prepare for in advance to keep things moving smoothly during the buying process. I want to give him a big thanks in advance for preparing this great article!
Terry Hayter with Solutions Bank wrote the following article of "good to know" information for buyers.
When a borrower makes an application, the lender must present them with initial disclosures within three business days. The disclosure package includes the Good Faith Estimate, Truth in Lending disclosure, and other legal forms as required by law.
If the disclosures are mailed, the lender must allow three business days for receipt of the disclosures by the borrower. During this period the only fee that may be collected is a reasonable charge for a credit report. If the application was made in person and disclosures delivered at that time, other fees such as for appraisal may be collected. If disclosures were mailed, only the credit report fee may be collected until the third business day has passed.
The borrower must be provided a copy of the appraisal a minimum of three days prior to loan closing. If not, closing must be delayed until the borrower gets a copy and the three-day window for review has passed. (The borrower may also opt out of this requirement)
Any changes in fees or rate that result in an APR change of 0.125% require re-disclosure. The borrower must then receive new disclosures and have at least three days to review before closing. Once again, this is to insure the borrower has time to review and is comfortable with the loan terms and costs.
Also, keep in mind that if lenders change in the middle of the process, the new lender will have to start the disclosure process over again. Changing lenders in the middle of a transaction may result in lengthy and costly extensions.
Many borrowers today are often too busy to come to the office to make the application. These borrowers do it conveniently by phone or online. In these cases, the disclosures are mailed to them. As a result, the timeframes and wait period will be slightly longer.
So, let’s say you want to close as quickly as possible. What can you do to be proactive and make sure the processing time moves as quickly as possible?
- Make the application with your lender in person if possible.
- Get a fully executed, clearly legible copy of the purchase agreement as soon as it's available from your agent to give to your lender.
- Be ready to pay for the appraisal when asked.
- Prepare and be ready to submit all requested documentation (pay stubs, W2's, bank statements, etc.) within 3 days of application.
- Carefully review the disclosure package and notify your lender of any corrections immediately.
- Lock your loan at the time of application or early in the transaction.
- Choose a credible, reputable, ethical lender you can trust to honor the rates and fees they disclose. Surprises at the closing table are not good for anyone.
For additional information, please contact Terry Hayter. You can also contact Terry for your purchase and refinance loan needs!
Terry Hayter
Mortgage Officer
Solutions Bank
Mission Farms
10685 Mission Farms
Leawood, KS 66206
P 913-239-1251 M 816-591-4738 F 913-341-2525
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