How Mortgage Disclosure Improvement Act (MDIA) Helps Home Buyers

While there are many ways and methods to help buyers in their home purchase, there is what one refers to as the MDIA or more appropriately called the Mortgage Disclosure Improvement Act. Although it is a new kind of regulation that most mortgage professionals find useful. But it all boils down how it would affect consumers in the long run.

There are four definitive major changes that have been brought on by the Mortgage Disclosure Improvement Act. These include the collection of fees, the latest business day definition, the timing of disclosure, and the change of the Annual Percentage Rate.

In the collection of fees, a borrower is only charged with a fee before the loan application which is a credit report fee. The fee is typically between the 12 and 35 dollar price range. It is reasonable enough however, it all depends on the company and if the credit report fee concerns a sole borrower or joint borrowers.

With the new business day definition, a Saturday is already designated as a business day. In the Mortgage Disclosure Improvement Act, Saturdays are already included in discussing mortgage timelines. Although mortgage paperwork will still be done on a Saturday, the act excludes federal holidays and Sundays.

The timing of disclosure pertains to the law which disclosures are required within the three days after sending in the loan application. This new regulation refers to home buyers who cannot simply close their applications within seven days. This way, the Mortgage Disclosure Improvement Act helps home buyers by providing them enough time to check and review the terms and conditions of the loan.

The Annual Percentage Rate or the APR has been modified in which if the rate suddenly increases following the last disclosure, a borrower is entitled to re-disclose and is not liable to close for three days within the last disclosure.

These changes are made to help home buyers in their home purchase. Some even claim that the very recent Mortgage Disclosure Improvement Act assist in crucial mortgage transactions. Purposes for the changes vary but there are enough sufficient reasons for it.

The rule for the collection of fees was created to safeguard borrowers from shelling out huge amount of fees before they obtain their disclosures or loan terms. Of course, lenders pay the credit report fee but the change is made where the costs are only limited to the credit report. So be aware that you have to pay for the credit report fee for your application.

With the Mortgage Disclosure Improvement Act, there are two added restrictions concerning closing. There is the timing of disclosure where borrowers are given time to evaluate preliminary disclosures and guarantee that they are getting the appropriate loan requirements. It is also obligated that a borrower must be disclosed within three days before closing if the Annual Percentage Rate rises more than .125%.

Furthermore, by adding Saturdays as business days, it helps maintain the closing. If you have acquired disclosures on a weekday, you are liable to make time for disclosure assessment on this added business day.