Closing on a piece of real estate can be a wonderful feeling, especially if you’re buying in Chicago. But those feelings of joy are often dampened by the hidden costs and fees that come with closing a deal. However, according to Realty Times, in an attempt to prevent such an occurrence, the Federal Reserve Board has revised the Mortgage Disclosure Improvement Act (MDIA) of 2008 (effective July 30, 2009). Here’s what’s new:
1) If the initial Good Faith Estimate (Annual Percentage Rate provided by the lender three days after receiving the written loan application) differs by more than 0.125 percent, the lender has to produce a new disclosure at least three business days before closing.
2) The borrower is allowed to terminate the deal within this three-day period and the lender cannot close on the loan.
3) The borrower may waive the three-day waiting period in a financial emergency (ex: foreclosure).
As Realty Times stated, these new rules are generally good for borrowers. It allows them to know what they are getting into before the deal is done. However, these new rules may also delay many closings throughout the Chicago area and nation, as most lenders struggle struggle to stay within 0.125 percent of the original estimate.
To learn more about loan disclosure rules and how they might affect your purchase of a Chicago home or condo, please contact real estate agent Sheldon Salnick at (312) 498-5080 or email him at [email protected]