HUD Homes / VA Homes News

New mortgage disclosure rules that are set to take effect at the end of this month will try to protect home buyers, but could lengthen the purchasing process.

The new Truth in Lending rules will require banks to:

• Provide a good faith estimates for mortgage costs within three business days after receiving the loan application, and before collecting any fees, other than the cost of a credit check;
• Wait at least seven business days after providing good faith estimates before closing on the loan;
• Give buyers new disclosures and wait another three business days if changes to a proposed loan increase the annual percentage rate by more than 0.125 percent.

Real estate professionals believe that the new rules will add at least one week to the home purchasing process.

The increased time to closing on a loan could potentially increase costs for buyers, because the best mortgage rates usually offer just a 30-day lock period.

It also could be another blow to the shaky housing market, which is already reeling from changes to the appraisal process that is delaying or even killing home deals.