Questions? Feedback? powered by Olark live chat software

Chrisman's Corner: What Should a Borrower Expect These Days?

JMAC’s brokers are experts in the lending process and are very good in explaining to their borrowers what to expect throughout the loan process. There have been plenty of changes in borrowing money to buy a home, and our brokers have become very adept at explaining the new process to their borrowers.

Everyone in the industry knows that, starting last October, prospective buyers began receiving two disclosure documents. The three-page loan estimate, also called the LE, is the first of the two new disclosures and should arrive three days after a borrower applies for a mortgage. Borrowers see all the key information they need to pick a loan: the interest rate, the monthly payment, and the closing costs. JMAC’s broker explain that clients will to be faced with long list of fees for everything from an appraisal to a title search. The language is prescribed by the government and is the same for all lenders. The LE is legally binding, meaning JMAC and all other lenders must honor the terms unless there is a material change—if the details of the purchase change, for example.

Once the borrower is ready to close the loan, the broker advises them to check that the mortgage terms are as expected. The borrower will receive a closing disclosure (“CD”) no later than three days before they are set to close the loan. While this largely contains the same information as the LE, the new window is designed to give borrowers time to review it thoroughly and work out any discrepancies.

There are drawbacks, including the time it takes to close a loan. Not only do lenders have less room for error, but they’re facing tighter deadlines. For instance, since the CD must be delivered three days before the close, missing this deadline can delay a sale. In many cases, that’s exactly what’s happened. So plan for a 45- to 60-day closing.