HERA Mortgage Disclosure Improvement Act

As of July 30th the new HERA Mortgage Disclosure Improvement Act went into effect.

These changes are meant to help ensure that the financing process is transparent and that a buyer fully understands the loan they are receiving and that they have time to review any changes before the closing.

What does this mean for you as a buyer and a seller?

This means that you want to work with a mortgage professional that is updated on this act and is a good communicator with all parties involved with the transaction. The closing date used to be determined by the seller and the buyer. Now there are some time lines that have to be met in order for the closing to take place.

Some of the items that can change the date of a closing are:

When the appraisal is received
Change in the APR of .125%
Change in Mortgage Product
Change in Closing/Signing Date
Change in Loan Amount
Unlocked Rate
Change in fees by third parties

Planning a closing for at least 30 - 45 days is wise. But with the new guidlines, this means there are some items that need to happen on a buyers end.

Be pre-approved (not just pre-qualified) BEFORE looking for a home
Work with your Mortgage Professional to get everything needed as soon as possible
Review and Sign your RESPAs (your preliminary loan papers) as soon as possible
Respond to your REALTOR and Mortgage Professional as quick as you can regarding any additional documentation they may need.

Working with someone you trust and someone that is in communication with all parties is vital to create a smooth transaction.