Taking the Stress Out of Closings

Alaine Bussler, Residential Closing Manager00001

David Kozuh, First Vice President—Residential Lending

Making the decision to buy a new home is thrilling, and the last thing we want is for the mortgage process to interfere with that. That’s why we make sure you know what to expect each step of the way. If you have a question or don’t understand something in a document you’ve been sent, we are here to talk you through it.

New Transparency

In the past, much of the stress in the closing process came from the way lenders were required to provide disclosure and loan documents to you. It made it harder to know how much your home—and your loan—would really cost after fees. That was typically something that came at the very last minute, without adequate time to review.

That has changed. The disclosure requirements are now much easier to read and understand. We are able to give you the first document, The Loan Estimate, three days after you apply for a mortgage, and the second document, The Closing Disclosure, three days before you close. This gives you time to review the terms and amounts you are agreeing to and enables you to ask questions if there is anything you are unsure of.

The Loan Estimate

Like its name implies, this three-page document summarizes the terms and price of your loan. It provides the information needed to develop a better understanding of your mortgage quote, including the amount you can expect to pay monthly based on the estimated closing costs.

The Closing Disclosure

The Closing Disclosure is an itemized account of the final settlement expenses and is provided three days before you close. Specifically, it confirms the final terms, how much cash you will need to bring to your closing, the loan details and the total cost of the loan. The Closing Disclosure also provides an accounting of any changes in the amounts that appeared in the Loan Estimate, along with reasons for them.

In combination, the two documents enable you to understand what, if anything, changed before agreeing to the final terms.

Big Numbers Shouldn’t Lead to Tense Times

The changes to the disclosure law essentially make the way we work with our borrowers—taking the time to answer questions and being transparent about what’s being agreed to—standard to the industry.

Give us a call, at 877-966-0202 and let’s talk about what we can do to keep your mortgage experience as stress free as possible.


Mortgages Built to Order

Jeri Ott, Vice President/Mortgage Loan Originator

Jeri_OttWhen it comes to residential mortgages, most banks offer the same lineup. These off-the-shelf solutions are structured to conform to the mortgage agencies’ guidelines (Fannie Mae and Freddie Mac) so that they can be resold in the secondary market.

As a borrower, this means if your property or financial situation does not conform to these standards, your mortgage request will be denied.

We Do Things a Little Differently
Although we sell some of our conforming mortgages on the secondary market, Old Second actually holds many of the mortgages we originate for our own portfolio.

We do this, in part, because properties in this area tend to be larger and many are income producers, such as farms and equestrian estates. These types of properties don’t qualify for conforming mortgages.

Borrowers who buy vacant land with plans to build their dream home also have trouble obtaining conforming loans. In these situations, not only do we lend, we don’t require our borrowers to offer additional assets to collateralize the loan over the lot’s value. When it comes to construction loans, we’re able to lend 80 percent based on the appraisal of architectural plans. This opens up the option of new construction to more people. We also allow our borrowers to be their own general contractor, which can offer additional cost savings when building on a vacant lot.

Keeping It Local
When we do hold a mortgage for our portfolio, we also service the mortgage. While few borrowers still make their payments at the local branch, borrowing locally means if any questions or issues arise, you know exactly who to call. That accountability is extended to all of our customers, even if we didn’t originate the loan and don’t service it. Advocating on their behalf by jumping on a call with their servicer or escrow agent to clear up an issue—when asked and when appropriate—is just something we do.

While a portfolio loan can be suitable for some borrowers, it may not be the right choice for everyone. Applying for a mortgage just isn’t a situation where one size fits all. That’s why it’s important to sit down with a lender before making any decisions. We can look at your whole picture and help you choose the right mortgage type for you and your property. After all, the costs associated with each loan type can have a significant impact on your finances not only today but also for years to come.

Present at Closing
All of our residential closings are held in our local branches. This way we can literally stay with each mortgage until it’s completed and funded. If last-minute questions arise or documents need amending, we can address them within minutes.

For more information on the different types of loans we can offer, download this handy comparison chart. Then, call us. We look forward to sitting down with you and talking things through so that you choose the best loan structure for your situation.


TRID Leads to Better-Informed Homebuyers

Tabitha Roach, First Vice President—Residential Lending Operations

RoachT_BUS0036qcThe Consumer Financial Protection Bureau revised the closing procedure for residential mortgages last October. The result: the TRID (TILA/RESPA Integrated Disclosure) rule. Also called “Know Before You Owe,” this rule is intended to:

  • Make shopping and comparing borrowing options and costs easier across lenders.
  • Present information in a more easily understood way, with less legalese and simpler wording.
  • Provide borrowers with enough time to review loan terms before agreeing to them.

While buyers will receive two new disclosure documents as a result of TRID, these replace four of the old forms. The first of these forms is the loan estimate. It will be provided within three days of a lender receiving a potential borrower’s information. This includes the borrower’s name and social security number, the property value and address, and with the amount of the loan request. This disclosure will then allow borrowers to make apples-to-apples cost comparisons among all the lenders they are considering using before proceeding with their application.

Objective: No More Surprises

The second document is the closing disclosure. This replaces the old settlement statement, which was not previously given to borrowers until after the loan was final.

Under TRID, homebuyers now have three days to review their loan’s final terms—and the associated dollar amounts—before committing to them.

The closing disclosure will also provide borrowers with a thorough list of any fees that were incurred with the transaction. This means lender fees will be itemized, as well as inspection fees, title fees, seller fees, etc.

By “knowing before owing,” borrowers arrive at the closing table better informed.

Timing Is Everything

There’s no denying TRID was a big deal for the mortgage industry. Frankly, it required substantial procedural changes for closing mortgages. But for those of us who were prepared, it has been a plus for our customers.

The only additional request being made of borrowers is one most were doing anyway: getting their fully executed contract to their loan officer immediately upon acceptance of their purchase offer.

Because TRID extended the closing process by six days, the sooner we can begin the loan review, the sooner we can gather the information needed to approve the loan request, prepare the necessary TRID disclosures, and keep the closing on schedule.

Should you have any questions about TRID, your mortgage request, the closing procedure or any other matter related to your home loans, call us. We’ve always worked hard to keep our borrowers informed; TRID has simply incorporated it into the federally required forms.