Historically, homebuyers and sellers would agree on a closing date, and then service providers – including lenders – would work as best they could toward meeting that date. Going forward, purchase contracts can still be written with a specific closing date in mind, but all parties need to take into account that the earliest any home purchase transaction can close is 7 business days after the homebuyer is issued his or her initial mortgage disclosures from the lender.
(Note: At Wells Fargo Home Mortgage, Saturdays, with the exception of federal holidays, do count as a business day for the purpose of disclosures only.)
2 – Upfront fees cannot be collected by the lender (except for a credit report fee) until the initial disclosures are received. If the disclosures are overnighted, they are considered “received” the next business day — (excluding Saturdays) allowing the fees to be collected on the following business day.
Historically, upfront fees could be collected immediately at the time of application for both in person and phone applications. Moving forward, the homebuyer must receive his or her initial disclosures before upfront fees can be collected. The only exception is the credit report fee which can be collected at application.
3 – The homebuyer must be provided with a copy of his or her appraisal a minimum of 3 business days prior to closing.
To help expedite the process, Wells Fargo Home Mortgage has elected to have a copy of the appraisal issued directly to the homebuyer — and the homebuyer must receive the appraisal at least 3 business days prior to the mortgage closing. If the homebuyer believes the 3-business-day required review period is not necessary for whatever reason, he or she has the right to waive that requirement.
4 – An increase of more than .125% in the Annual Percentage Rate (APR) from the initial Truth in Lending disclosure (TIL) requires the TIL disclosure to be revised and reissued to the homebuyer. The homebuyer must receive a revised TIL disclosure at least 3 business days before closing, providing the homebuyer with the time required to determine if the homebuyer is comfortable with his or her loan choice. If mailed, the TIL disclosure is considered “received” 3 business days after mailing.
A more typical contract date may be 30-45 days — or possibly longer (such as with a new construction loan). Considering that many things occur and may be changed or finalized throughout the course of the transaction, there are a number of things that can impact the homebuyer’s APR. Therefore it is critical on the front end to ensure that estimated fees are as accurate as possible.