Can You Close A Loan In 30 Days? It Just Got Tougher.

There is a new law coming soon that will make it tougher to get a loan closed in 30 days -- not impossible -- but tougher.

The new change that takes effect on July 30th has to do with the way that loan officers disclose the TIL (Truth In Lending) disclosure.

The Truth-In-Lending form is a one page form that outlines the APR, Loan Amount, Interest Rate and other important loan terms and the way that the rules are going to be going forward, it will no doubt add more time and frustration to what is already a difficult process at best.

In my opinion, starting in August - loans will take "longer" to close - and it may be wise to be conservative when planning a time line - 45 days might be the new number to shoot for where 30 days was "reasonable" before. Timing will have to be perfect to get a purchase loan done in 30 days after this law takes effect.

Highlights of the new Truth-In-Lending law:

1. No upfront fees can be charged to the customer, except for a credit report charge until they have received the TIL. ( No more up front fees for those lenders who still charged an up front "commitment fee" or anything like it)
2. TIL must be disclosed to the buyer within 3 days of application.
3. Once they receive the TIL, then there is an additional 7 day waiting period before the loan can close.
4. Any changes to the loan that result in a change to the APR, you will need to get a new TIL disclosure and then there is another 7 day waiting period.

Generally speaking, the numbers in a loan transaction that frequently change and can impact the time line under the new law include: loan amount, fees such as title company charges, appraisal charges, etc.

So starting next week, it is more important then ever, that you work with an experienced and knowledgeable mortgage loan officer and know that there are new disclosure rules regarding the Truth In Lending disclosure process that will take some time to "get used to".

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