Anyone applying for a mortgage should be aware of new, little-publicized federal consumer protection rules that take effect on July 30, 2010.
The new Federal Reserve guidelines require lender to disclose estimated mortgage costs within three business days of receiving your loan application.
Required disclosures included Truth-In-Lending Act calculations (a breakdown of your Mortgage's monthly an overall costs) as well as annual percentage rate (APR) for the loan.
If you don't get this information within three days you can pull the plug on your loan application.
The new rules prohibit lenders from collecting any fees other an reasonable credit-check charges until you've received all initial disclosures.
There is a significant change from the current system. This allows a full review before the client is changed any appraisal or application fees other than a small credit check fee.
The other rule changes mandates a seven-day waiting period before you can close the loan. I other words your have a week to thing about to be sure that the particular mortgage is right for you.
Lenders must give you final Truth-In-Lender Act numbers and a copy of your home's appraisal at leas three business days before your loan closes.
If your Mortgage's APR rises more than 0.125 % above the initially disclosed rate the lender must file to obtain a change of circumstances and the lender must "re disclose" the higher costs-triggering a second seven-day waiting period.
What are the new rules repercussions?
First, mortgage closing dates will depend on lender and settlement agents providing accurate estimates and delivering disclosures and appraisals on time.
Second, the new rules will give consumers better estimates of key mortgage expenses and more time to review these figures. Hopefully, this will lead to fewer cases of dishonest lenders sticking homeowners the questionable last-minute charges.
Roger Herrick
www.ContactHerrick.com
888-474-8022
The new Federal Reserve guidelines require lender to disclose estimated mortgage costs within three business days of receiving your loan application.
Required disclosures included Truth-In-Lending Act calculations (a breakdown of your Mortgage's monthly an overall costs) as well as annual percentage rate (APR) for the loan.
If you don't get this information within three days you can pull the plug on your loan application.
The new rules prohibit lenders from collecting any fees other an reasonable credit-check charges until you've received all initial disclosures.
There is a significant change from the current system. This allows a full review before the client is changed any appraisal or application fees other than a small credit check fee.
The other rule changes mandates a seven-day waiting period before you can close the loan. I other words your have a week to thing about to be sure that the particular mortgage is right for you.
Lenders must give you final Truth-In-Lender Act numbers and a copy of your home's appraisal at leas three business days before your loan closes.
If your Mortgage's APR rises more than 0.125 % above the initially disclosed rate the lender must file to obtain a change of circumstances and the lender must "re disclose" the higher costs-triggering a second seven-day waiting period.
What are the new rules repercussions?
First, mortgage closing dates will depend on lender and settlement agents providing accurate estimates and delivering disclosures and appraisals on time.
Second, the new rules will give consumers better estimates of key mortgage expenses and more time to review these figures. Hopefully, this will lead to fewer cases of dishonest lenders sticking homeowners the questionable last-minute charges.
Roger Herrick
www.ContactHerrick.com
888-474-8022
