TRID stands for TILA, RESPA, Integrated Disclosures.
At its core, it is new mortgage disclosure forms and rules that govern all residential mortgage transactions.
New Federal Rules are effective October 3, 2015
Q&A for this significant industry-wide change below!
Q: To whom do these new rules and disclosures apply?
A: Any potential buyer that will obtain a mortgage to purchase your home.
Q: Why should I care about these TRID rules and disclosures if they apply to the buyer?
A: Because while the rules apply to the buyer, there could be impacts that affect the entire transaction, which includes you as the seller.
Q: What are some possible impacts to me as the seller?
A: Below are the Top 6 Possible Seller TRID Impacts:
1. If your buyer is getting a loan to purchase your house, the process to get that loan will take longer. Set clear closing expectation with 45 day contracts.
2. There are situations where closing can be delayed 3 or more days because of changes. So AVOID LAST MINUTE CHANGES if possible.
3. Because closing delays are possible, back-to-back closings (close on the sale of your current house as the seller, then turn around and close on the sale of your next home as the buyer) may not be accommodated by some lenders and title companies. Don’t let the domino effect create additional stress.
4. Buyer pre-approvals will be more generic and some lenders may not offer pre-approval requests at all anymore because of new definitions under the TRID rules.
5. If you’ve bought or sold recently, the form signed at closing will look different, and what you sign as the seller may even look different from what your buyer signs.
6. With industry-wide software updates, new forms, and longer time periods to complete the process, there may be higher costs involved.
Article & photo courtesy of Sibcy Cline Mortgage Services