In the wake of the subprime mortgage meltdown in 2008, housing and financial officials called for a review of the home lending process in the United States. After a few years of analysis and deliberation, the Consumer Financial Protection Bureau determined that mortgage applicants deserve better protection when it comes to origination and funding fees.
If you’re looking at homes for sale in Irvine, it’s important to know borrowing money to acquire a home is not free. In many cases, it is not cheap, either. Nonetheless, borrowers should not be subject to excessive fees, which were a major problem in the heady days of the last American housing bubble.
Since October 2015, homebuyers and homeowners refinancing their existing mortgages are expected to review and sign four important forms, which have been updated as a matter of consumer advocacy.
Two of the forms must be evaluated and signed upfront. These are the Loan Estimate and the Closing Disclosure. Seasoned mortgage borrowers previously knew these two forms as the Good Faith Estimate (GFE) and the Truth-in-Lending Act (TILA) disclosure. The replacement forms provide a breakdown of all fees, costs, terms, and projections associated with the loan, and they show information that will appear on the HUD-1 settlement statement.
It is crucial for borrowers to know that executing the Closing Disclosure will trigger a three-day waiting period before the actual closing takes place. During this time, applicants can review the loan documents and think about the significant financial responsibility they are about to assume.
The two other mortgage lending forms that are also very important for borrowers to review and understand prior to signing them are the promissory note and the actual mortgage instruments. These forms will vary in accordance to the terms of the loan, the type of property, and the tenancy. Depending on the state where the property is located, the mortgage instrument may be known as a deed of trust.
The mortgage process, from start to finish, can be confusing—especially for first-time homebuyers. Working with an experienced real estate agent in Irvine can make you feel more secure when looking for and buying a home. To learn more or to schedule an appointment, give us a call at (714) 454-6304 today.