The Mortgage Disclosure Improvement Act of 2008 made changes to the Truth in Lending Act, and some of these changes became effective July 30, 2009. In order to avoid delays in the closing of your loan, you need to understand how these changes can affect you.
The main changes are the implementation of: 1) a new Good Faith Estimate form, and 2) a seven-day waiting period before the closing of a loan.
The new Good Faith Estimate form is intended to make comparison shopping easier for consumers by introducing more uniformity into the process and by encouraging consumers to compare the rates, terms, and closing costs of other lenders.
The waiting period of seven days is designed to allow consumers ample time to become familiar with the disclosures related to their loan. Thatâ€™s the good news. The bad news? Any changes require an additional three-day waiting period, and some changes, such as changing lenders, may start the whole process over again. These last-minute changes can be in the amount of the down payment, the lender, the terms of the loan, the closing costs, or the interest rate.
In order to avoid delays, buyers should lock in an interest rate at least seven business days prior to the desired date of close. Furthermore, consider refraining from scheduling the closing date until after the waiting period is over, or at least, be sure there are no penalties for changes to the closing date.
The key to closing on time will be planning ahead and leaving nothing to chance.