Friday, July 30, 2010

TRYING TO CLOSE ON A HOUSE & ANOTHER DELAY?

Among other things, recent changes in the federal Truth in Lending Act and RESPA can slow the closing process. There is now a new HUD-1 form (Closing Statement)that title companies are getting used to which may add several more hours of document preparation. Their unfamiliarity and the fear of making a costly mistake in the Good Faith Estimate are sometimes prompting lenders to ask for closing cost information more than once and in several formats. Be sure to use an experienced title company who will more than likely have had more than enough transactions under their belt to have mastered the new documents.

Lending rules have also made it harder to close on time especially if circumstances change late in the deal. Amendments to the Truth in Lending Act require a 3-day disclosure period if a borrower decides to change the loan amount or anything else that might effect the interest rate. A change in loan amount could be due to an agreed upon amount off sales price in leiu of repairs. And changes of more than 0.125% in the APR immediately trigger another disclosure.

To avoid delays, work with knowledgable, seasoned professionals and avoid last minute changes whenever possible.

No comments:

Post a Comment