Part 7 of 7: How TRID Makes Lending Safer for Homebuyers

In this seventh and final installment in my series about the big changes that have followed the mortgage meltdown, I'll discuss the "Know Before You Owe" Law, also known as TRID.

In the real estate industry, the "Know Before You Owe" Law is also known by the name "TRID," which stands for "TILA-RESPA Integrated Disclosure." It deals with the way that we receive our initial disclosures from the lender.

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If you're interested in purchasing a home, wouldn't you want your lender to provide you with information that is pertinent and specific to the loan that you apply for? This would include details like what interest rates are, what your payment with impounds and escrows included would be, and where exactly your closing costs go. 

All this is included in the initial document called a loan estimate, in which TRID requires that information about the loan be clarified. I love this document because it actually speaks in a language that we use - not fancy bank arithmetic that's full of jargon like "APR" and other things that can be manipulated.

The Know Before You Owe Law also regulates how transactions are closed. Back in part three of this series, we discussed the no-tolerance policy wherein some of the fees were never allowed to go any higher. TRID requires a closing disclosure that clarifies and compares the estimated fees of the original loan with the actual closing fees. This section makes clear how much you'll actually pay for the loan as an overall percentage of the cost.

Isn't this awesome? Just think about all these steps that have been put in place to make sure that today's lending atmosphere is much safer than it once was! In fact, this is a great excuse for you to reach out and schedule a call with us. Let's review your home purchase and generate your homeownership success. I can't wait to hear from you!