There are new Federal consumer protection rules that take effect July 30, 2009 affecting those applying for a loan to purchase a primary or secondary home, or if you are refinancing.

It’s not been given a lot of publicity, so if you are considering making a purchase and getting a new loan, or possibly refinancing an existing loan you need to pay attention.

The highlights are as follows:

The lender must provide or mail an initial Truth In Lending disclosure within 3 days after receiving the borrower’s loan application.

Lender’s must deliver or mail a finalized Truth In Lending disclosure statement at least 7 business days before closing on the property.

If the annual percentage rate (APR) increases more than 0.125% the borrower must receive a revised Truth in Lending at least 3 business days before closing. What could cause your APR to change?  Several possibilities.  If you allowed your initial interest rate on the loan to float with the market but rates increased, or if the lender got inaccurate estimates of costs from a third-party participant in the transaction such as the settlement company.

Thanks to Paul Soule from Coldwell Banker Home Loans for providing this update.