If buying or selling a home along the Jersey Shore is in your future plans, you should be aware of the new “Know Before You Owe” rules that were put in place by the Consumer Financial Protection Bureau (CFPB) earlier this month. The CFPB agency was brought about after the 2008 recession to help consumer finance markets work more effectively by making rules that are consistent and by fairly enforcing those rules.
The new rules now require mortgage lenders to provide loan borrowers with more concise and clearly laid out details of their loan. The new Loan Estimate form must be provided to potential borrowers within three business days after the application is submitted. This form will provide buyers with important details such as the interest rate, terms of the loan, and other important features. There must also be a seven day window for borrowers to review the loan documents once receiving the loan estimate form and before closing occurs. The new changes will provide borrowers the opportunity to compare loans from various lenders easier.
Property buyers will also now be given a Closing Disclosure form at least three business days prior to their scheduled closing, which provides them with adequate time to review for accuracy. This form will replace the “Truth in Lending” form and the “Good Faith Disclosure Form” that was given in the past. Gone are the days of arriving to closing only to be surprise by a charge or fee you were unaware of or not expecting.
With the new time frames set it place it will make closing in a short time frame more difficult. If you are looking to close on a home in a short period of time know that if you make any changes to the loan terms after the countdown to closing window has begun, lenders will be required to draft new disclosure documents, and the review period begins again and could delay your closing by up to two weeks. Another way to avoid delays is to avoid going on a credit spending spree before closing on your property. If your credit score changes substantially after you submit the initial mortgage application, it could result in you having a higher interest rate which would result in new documents having to be drawn up and the time frame for closing extended.
If you are looking to buy or sell a home along the Jersey Shore, The Ferzoco Group are experts in real estate from Ocean City to Cape May and can help. We’d love to hear how we can help you reach your real estate goals. Our job is to make your tomorrow better than today. Contact us today via email or give us a call at 609-264-6762.