Real Estate News for North Pinellas County

Archive for July 21st, 2009

Some new rules will change the mortgage process

 Getting ready to buy a new home? The federal government has come up with a new set of rules that may have an impact on your mortgage. The new rules, from the Federal Reserve, go into effect at the end of this month.
Here are the high points:
— Lenders must provide you a mortgage cost disclosure within three business days of the date you apply for the mortgage. If they don’t you can walk away from the deal.
— Lenders can’t collect fees until you get that aforementioned cost disclosure statement. The only exception is a reasonable fee for checking your credit. It has been fairly common for lenders to ask for money up-front to cover appraisals, credit checks and other fees. No more.
— Once the lender provides the mortgage cost disclosure, there must be a seven-day waiting period before the closing.
— The appraisal must be delivered by the lender to the borrower at least three business days before the loan closing. Borrowers have always had a right to see the appraisal, but they often didn’t know they had that right, and they often didn’t request it because they didn’t know they were entitled to it. Now, the closing can’t happen until you’ve received it.
— If the annual percentage rate of the loan goes up more than one-eighth of one percent between the time you get the early cost disclosure and the closing,¬†the lender must re-disclose all the costs and provide an additional seven days for you to consider the deal.
It is all meant to make the mortgage transaction more transparent and give borrowers more confidence about the deal they are signing.