During your search for homes for sale in Fredericksburg VA, you may have read about changes to something called the HUD-1 Settlement Statement, among other documents such as the Truth-In-Lending document, and the Good Faith Estimates; all three documents are set to be eliminated as part of the new rules governed by the Consumer Financial Protection Bureau in accordance with the Dodd-Frank Act.
If you have purchased a home in the past, you’ll remember the HUD-1 as a long form with all of the important financial information that provides you with the bottom line – what’s this house purchase costing you every month? Under the new process, which went into effect October 3rd, 2015, the HUD-1 Settlement Statement and the Truth-In-Lending Statement will be replaced by the Closing Disclosures, or “CD.”
What does this mean for you when you are searching for homes for sale in Fredericksburg VA?
The CD must be provided to you, the prospective buyer, three full days prior to the closing. The new format will be shorter and more user-friendly.
The updates to the process were made in an effort to streamline the loan application process, making it easier for you to understand complex financial documents full of important information such as the interest rate of your loan, the listing of all closing costs, and the amount of your monthly payment. Since the loan documents will be required to be completed three days prior to closing, this gives you, the buyer, time to review all of the complicated information and ask pertinent questions prior to settlement.
Other changes include a new requirement of lenders to provide you with a loan estimate within three business days after you apply for a mortgage.
Changes Effect Closing Timeline
However, as during any time of change, there could be delays in settlement because of the change in a long-standing process. The new process will change the way buyers, sellers, lenders, and title companies work together; now, the lender will ultimately be held responsible for meeting the new regulations.
While you are searching for homes for sale in Fredericksburg VA, our agents will familiarize you with this new closing process and ensure that you are confident in your lender. If you are shopping for a mortgage, we urge you to chat with our preferred lender Sandy Grimes of America’s Choice Mortgage Co., LLC; Sandy is well versed in these changes and is a highly dedicated and experienced lender who will work hard on your behalf.