TRID changed the loan process on October 1st. Today, we discuss some commonly asked questions about this new law.
What is TRID? TRID replaces the Good Faith Estimate and Settlement Statement. Now, we have a loan estimate earlier in the transaction and a closing disclosure towards the end.
How does the loan estimate compare to the Good Faith Estimate? A loan estimate now is significantly more accurate. Previously, it was more of an educated guess instead of an accurate statement. We’re required to verify information ahead of time now. There isn’t any tolerance for additional lender fees, credit report fees, or attorney fees. A loan estimate provides associated fees such as the interest rate, annual percentage rate, and attorney fee in addition to how much cash the buyer should bring to closing.
What are the new guidelines of TRID? The closing disclosure is better compared to the settlement statement. This document must be presented to the buyer three business days prior to closing. If a buyer doesn’t agree to sign this document, it could lengthen the process. However, every party should be proactive towards the transaction's conditions to avoid last-minute disagreements.
What will sellers no longer know? Now, sellers won’t know the buyer’s interest rate, how much they put down, what kind of loan they get, and similar information unless stated in a contract.