When it comes to closing your residential home loan be prepared to wait, sometime as much as two months before the transactions closes. Beginning in October 2015 the government imposed loan disclosures rule known as TRID designed to assist consumers by providing residential home loan buyers with information intended to combat abuse in the residential loan process. The new requirements provide for a Closing Disclosure (CD) which mandates delivery three days prior to closing. The CD provides line item charges of all closing cost. The three-day grace period was designed to give borrowers more time to discuss their loan documents with their lender or attorney prior to closing. The unintended result of this disclosure is an increase in the time period to process the new loan.
The average time to close a refinance loan increased one day from 47 days in December to 48 days in January, while the average time to close a purchase loan in January climbed one day to 51. The average time to close FHA loans increased from 49 days in December to 51 days in January. The time period to close a conventional loan, defined as a loan under $417,000 and insured by Fannie Mae or Freddie Mac, remained largely unchanged in January while the time to close VA loans increased from 52 days in December to 53 days in January.
It is important that all parties to a residential transaction be mindful of these requirement s and the possible delays in closing. If you are unsure about how the new TRID regulations can affect your transaction, give us a call. We are more than happy to assist.