Source: Bankrate —
Buying a home is a lot of things: exciting, daunting, anxiety-inducing. But there’s one thing it’s usually not: easy. That’s particularly true if you need to finance your purchase with a mortgage. Getting a handle on home-loan jargon can feel a lot like learning a new language: Take TRID as an example.
The good news? This mouthful of an acronym is extremely helpful for homebuyers. Let’s take a closer look at what TRID means, and how it can help protect and inform you on your buying journey.
What is TRID?
In real estate lingo, TRID stands for TILA-RESPA Integrated Disclosures. It’s actually a combination of two other acronyms, both related to federal law: TILA is the Truth in Lending Act, which has to do with the fees and expenses involved in a mortgage loan, and RESPA is the Real Estate Settlement Procedures Act, which relates to the time, fees and expenses involved in the purchase.
TRID real estate legislation simplifies TILA and RESPA, consolidating them into one set of rules. That’s helpful since both apply to the homebuying process: TILA outlines disclosures and the documentation your mortgage lender is required to give you informing you about the loan. RESPA governs everything from closing costs to how your money gets held in escrow and when it gets released to the lender. TRID’s combining of all of that information provides you as a buyer, as well as your lender and your real estate agent, a big improvement in clarity about what’s required when.
Since going into effect in 2015, every home loan in the U.S. has been required to follow TRID guidelines. The law is enforced by the Consumer Financial Protection Bureau (CFPB).
‘Know Before You Owe’
As if there aren’t already enough acronyms to keep track of, you might also hear TRID referred to as Know Before You Owe, or KBYO. This actually provides a better description, because the point is to make sure borrowers are well informed and understand what they’re committing to. It’s an effort to thwart predatory lending practices by putting enough information in the consumer’s hands to make an educated decision when buying a home.
TRID disclosures
;
