New Mortgage Closing Rules Will Help Northern Virginia Homebuyers

If you are planning to purchase a home in Northern Virginia going forward, you're in luck! New mortgage closing rules took effect on October 3 and are expected to help buyers understand the terms much easier than with past documents.

Prior to these new mortgage closing changes, homebuyers were given numerous sets of disclosures containing unfamiliar terminology— if you are not in the real estate industry or have purchased a home before. The new rules have reduced those disclosures down to two sets, containing eight pages in all, with clearer answers to common questions and streamlined information.

What do the new disclosures involve? Here are the two new documents you will see when you secure a home loan in NoVA:

1. Loan Estimate
The loan estimate is one of the two new disclosures included in the TILA-RESPA Integrated Disclosure Rule or TRID and you will receive this once your loan is approved. The loan estimate outlines the following:

• Expenses associated with your loan— including any pre-payment penalties and expenses in your escrow account.
• Expected future changes and interest rates.
• Your projected monthly mortgage, with taxes, insurance and other assessments.
• The estimated closing costs for the loan and how much you will need to have on hand at the time of closing.
• Information on what services buyers can shop for— including the appraisal, pest inspections and surveys.

Note that there is now a 10-day grace period for buyers to shop other loan options, from 15 to 30-year mortgages and adjustable and fixed-rate products.

2. Closing Disclosure

This document now replaces the HUD-1 Settlement Statement and Truth-in-Lending form given to buyers at closing and is available three days prior to your scheduled closing. This disclosure outlines the following:

• Final costs for both buyer and seller.
• Exactly what you will need to pay at closing.
• How much is paid to each real estate agent.

All part of the new "Know Before You Owe" initiative, these new mortgage rules will undoubtedly help Northern Virginia buyers avoid any surprises at the closing table. However, homebuyers in Alexandria, Annandale, Arlington, Burke, Falls Church, Fairfax and the surrounding areas should note that closings may now take 15 days longer— extended from 30 to 45 days.

If you have questions about buying a home in Northern Virginia, do not hesitate to give me a call!

I happily serve the areas of Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax City, Falls Church, Great Falls, Herndon, Lake Ridge, McLean, Mount Vernon, Reston, Rosslyn, Springfield, Tyson’s Corner and Vienna. 

Earle Whitmore

Long & Foster Real Estate, Inc.
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