Can You Handle The Truth In Lending When Buying Alexandria VA Real Estate |
New Lender Guidelines May Affect Your Clsong Date
If you're watching the clock as the deadline approaches for the First-Time Home Buyer Tax Credit to expire, you should also know that the federal government has made recent changes that will affect your home purchase or sale.
These changes went into effect on July 30, 2009 and they are important for both buyers and sellers. When buying and selling homes, many people plan their timelines based on the closing date that has been agreed upon in the purchase agreement between the buyer and the seller. While both parties have consented to a date, the things that go on behind the scenes of the transaction have a definite impact on the closing date. For a first-time buyer trying to meet the deadline of the tax credit, these changes are important to understand.
Here are four key elements that you need to know:
- Receipt of lender disclosures now dictate the closing date - the earliest that any home that is being financed can close is 7 business days after the consumer is issued his or her initial disclosure from the lender.
- Upfront fees cannot be collected until the disclosures are received by the consumer - with the exception of the credit report fee, lenders are not allowed to collect any fees until the consumer has received all required disclosures from the lender.
- The consumer must receive a copy of the appraisal report a minimum of three days prior to closing - the consumer will have the right to waive this review, however, if the appraisal report has not been received, closing can be delayed to allow the purchaser the opportunity to review the full report.
- Changes to the interest rate must be disclosed...again - if the total annual percentage rate (APR) changes more than .125% from the initial disclosure, then the lender must provide this disclosure to the buyer at least three days prior to closing.
How do you protect yourself as a buyer? First and foremost is to choose an accountable, dependable, local lender for your loan. Like an experience real estate agent, an experienced lender will have the ability to qualify you for a mortgage, answer your questions about your loan, and disclose all of the terms of your mortgage. Once you've chosen your home and have an acceptable offer from the seller, your successful closing is in the hands of your lender.
How do you protect yourself as a seller? Rely on your listing agent to ask questions of the buyer's lender to give you the confidence you need to accept the offer and take your home off the open market. As a listing agent, I have a list of questions that I ask the buyer's lender whenever a contract is submitted on one of my listings. I review the lender's answers with the seller and based on the lender's responses allow the seller to make a decision on accepting the offer.
Either way, if you're not under contract now, from this point forward I would recommend allowing more than the traditional 30-45 days to allow closing to take place.