DISCLOSURES
Certain information must be disclosed to you and to the Lender in writing during the application process. You will have to acknowledge receipt by signing documents to that effect. Examples of these disclosures include the Good Faith Estimate, Truth in Lending, Servicing Disclosure, Occupancy disclosure and so on. Most states have their own specific disclosure requirements so please check with your Mortgage Broker or Lender.
GOOD FAITH ESTIMATE
This is a list of what your closing costs are estimated to be to secure a mortgage. For a rule of thumb, closing costs can range from between 3-6% of the loan (the higher the mortgage amount, the lower the percentage cost and visa-versa).
They include:
• Broker and Lender fees (includes Appraisal costs, etc)
• Title company fees (includes Title Insurance, etc)
• Government fees (includes Recording fees, etc)
• Any miscellaneous fees (survey, etc)
• Upfront Lender costs (interest until the end of the month, Insurances, etc)
• Initial Escrow balances (beginning balance to pay Taxes, Insurance when due)
TRUTH IN LENDING
This form is required by the government and is filled with valuable details regarding your loan.
Here are some examples of what this document covers:
• APR (Annual Percentage Rate)
• Total interest charges (estimated if an ARM mortgage)
• Total Payments (estimated if an ARM mortgage)
• Payment Schedule (estimated if an ARM mortgage)
• Prepayment Penalty (if there may be one included)
• Late fee costs (please pay all mortgages on time to eliminate this outrageous fee)
• And numerous other options and facts your Mortgage Broker or Lender will need to explain
SIGNED DOCUMENTS
Once you signed the relevant documents you should receive a copy for your records. Your representative will keep you informed as to how your loan file moves along during process. If more documents are required, they will request it from them. Once this portion is completed, then your application will be placed in process.
APPRAISAL, INSURANCE, TITLE
The Mortgage Broker or Lender will request these items be done on the property. A bank approved appraiser will be sent to the property you are purchasing or refinancing to determine its value and turn in a written report to the Mortgage Broker or Lender. The insurance agent will be contacted once the appraisal is completed to assure adequate coverage is placed on the property. The title company will verify the property is free from debts and property can be transferred with the Lending institutions as the Mortgagee.
All these documents are given to the Lender’s underwriter to verify the property has enough coverage and collateral to satisfy their guidelines signed. If you are refinancing and you have a copy of your survey, you may produce it as part of the application process to help save you closing costs. This written report is given to the Title Company for their records as well as the Lending institution.