In our Gulf Shores Real Estate News for September 2015 we look at "Gulf Shores Mortgage Rates after the Stock Selloffs" last week, "Changes That May Affect Those Closing on a Gulf Shores Home This Fall", and we say goodbye to this Newsletter Category at our Blog:
Gulf Shores Mortgage Rates Fall After Stock Selloff
Gulf Shores Mortgage rates fell last week after market turmoil sent the yield on a 10-year Treasury briefly below 2 percent.
Freddie Mac says a 30-year fixed-rate Gulf Shores mortgage averaged 3.84 percent tin the week ending August 27, down from 3.93 percent the previous week, and the lowest since May. A year ago, 30-year rates averaged 4.1 percent.
This is the fifth straight week that 30-year rates have stayed below 4 percent. A 15-year fix averaged 3.06 percent, down from 3.15 percent last week. A one-year adjustable rate mortgage averaged 2.62 percent, unchanged from last week.
"Events in China generated eye-catching volatility in equity markets worldwide over the past week," according to Freddie Mac chief economist Sean Becketti. "Interest rates rocked up and down — although to a lesser extend than equities — as investors alternated between flights to quality and bargain hunting among beaten-down stocks."
Freddie Mac expects 30-year Gulf Shores mortgage rates to remain subdued in the short-to-medium term.
A separate report last week showed home sales continue to gain. The National Association of Realtors says pending sales of existing homes in July were up 7.4 percent from a year ago, to the third highest level this year.
Let's look at what this means, along with what a change in RESPA procedures may mean for anyone buying a Gulf Shores home this fall…
Buying a Gulf Shores Home? Changes Are Coming
If you're buying a Gulf Shores home this fall, get ready for a change in the TILA/RESPA Integrated Disclosure rule, which includes the acronym that may end all acronyms: Truth in Lending Act/Real Estate Settlement Procedures Act. (You may also see the acronym TRID refer to this as well.)
What the heck are we talking about?
The changes to the process of getting a Gulf Shores mortgage are significant, especially for those real estate professionals who have been working in the residential side of the business for quite some time.
The first major change is in the paperwork. The existing Truth-In-Lending statement is getting merged (somewhat) with the existing HUD-1 settlement statement.
What does this mean for most home buyers?
Closing agents, title companies and closing attorneys will now deliver a “Closing Disclosure” to the borrower. The Closing Disclosure is a five-page form that combines many aspects of the Truth-in-Lending form and the old HUD-1 settlement statement (also affectionately known as the RESPA statement).
In addition to the Closing Disclosure that is given to the borrower and not to the seller, the buyer and seller will sign a Settlement Statement. This new settlement statement has a very different look than the old HUD-1 settlement statement. Since most buyers and sellers found the old HUD-1 form to be fairly incomprehensible, you’d hope that a redesign would make it more clear where the cash is coming from and going to in the closing.
Unfortunately, it doesn't appear that the new form will strike most buyers and sellers as much of an improvement. The key to clarity in the closing of real estate transactions is the person working with the buyer/borrower at the closing. And that brings us to the next new issue coming down the line.
The government has always had a rule that requires lenders to give you the closing cost disclosure in the form of the HUD-1 one day before closing. But frequently, the HUD-1 has been given to borrowers on the actual day of the closing or late on the day before closing. The borrower then has little time to review the closing statement and understand it before going to closing on their new home.
The government is trying to fix the timing issue, hence, the new timing requirement that will come on October 1.
The new rules will require lenders to give a borrower three days to review the Closing Disclosure, and that must be at least three days before closing. In other words, about seven days before closing, a lender must send the disclosure to the borrower. The borrower would then have three days to sit and review the disclosure and the closing could occur three days after the end of that first three-day period.
There is a bit of confusion in the industry relating to the impact the change will have on the timing requirements, on the calculation of certain fees (in particular owner’s and lender’s title insurance policies) and whether other last minute changes to the Closing Disclosure would require a new three-day disclosure period and push closings out at the last minute. This will play out in real time during hundreds, or even thousands of closings set for the end of September and into the beginning of October — and that’s what’s making everyone in the real estate business so nervous.
We’ll all be watching to see what the regulators come up with for Oct. 1.
Our Final (Official) Gulf Shores Real Estate Newsletter
This will be the final issue of our "Gulf Shores Real Estate Newsletter." We keep this website completely updated every couple of days throughout each and every month, and therefore, retiring what is categorized as a "Newsletter" doesn't really mean much, other than the fact that we'll continue to bring you the most up to date news we possibly can, only itemized more in our other categories to your right.
We made the decision to dissolve the "Gulf Shores Real Estate Newsletters" category in lieu of making the information we include in the newsletters easier for you to find in the specific categories for which they have covered in the past.
For example, instead of being buried in a library of past newsletters, articles we included in this issue will now be expanded on further and listed in the category for which it most applies. This month, the two articles above would fall under the Gulf Shores Mortgage Info and Gulf Shores Real Estate categories to your right, so it will make our news easier for you to find and look back on.
We hope you will continue to enjoy the information we provide for you here at our website/blog, and find that by us breaking these stories down and into the categories they would fall under, it will make finding the information you want much easier.