New closing forms when buying a home in Ann Arbor
Hopefully your Realtor was able to get the documents to you at least ONE day before you had to sign so you could review them.
Well all of that is going to change on August 1st. Two of the forms will go away and two more will be added. But, that is not the big issue as all the GOOD lenders will have prepared for this.
The big challenge in this NEW requirement on TIME.
The Loan Estimate Document will be sent to you 3 days after you make application with a lender. It will be 3 pages long vs the original 7 pages one.
The Closing Document is due 3 days before you close so you can review it.
The National Association of Realtors (NAR) is recommending you actually get the documents seven days prior to closing, so when you go into the three-day period, you don’t have to make any changes. Making changes at the last minute comes with another 3 day waiting period.
Try and remember that the new forms are to help you have better transparancy when choosing a lender AND your monthly payments.
Both the loan estimate document and the closing document were beta tested and buyers and sellers found them much easier to read and understand. The goals of course are NOT just shorter forms but easy to understand documents that afford you the opportunity to discuss with each other or your Realtor.
For most homebuyers, a home is the biggest purchase they’ll ever make. It’s also the most complicated financially, with a lot of paperwork to review and understand. The new forms simplify and clarify a lot of information. Essentially, the new forms work to allow you to compare loans and make better informed decisions.
The biggest glitch I personally see is the time frame IF changes have to be made. For example, the past if I sent the closing documents to my buyer or seller and we found a mistake, it was a simple phone call to the title company for them to correct it. (with documentation of course)
NOW once corrected it will take ANOTHER 3 days to be approved all over again.
Imagine you are ALL packed up, truck rented, have to be out of your home or rental and you get the closing document and you see a error on the closing document…it is corrected and you wait ANOTHER 3 days?
Understand now why NAR is saying to get those documents and loan approvals in 7 days and not 3 days?
There is more information on the Consumer Financial Protection Bureau.
***As a buyer or seller you have to be cooperative when the lender you choose asks you for more documentation, because if last-minute changes are made, a new three-day waiting period kicks in.***
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