What Goes on at Our End
After you submit the property information for approval, we'll order your title and escrow settlement. If you cancel the loan after title work has been ordered, you may be responsible for preliminary title fees charged by the title company.
Next, a qualified appraiser will look over the property and submit a report to us. This lets us determine if the home is worth enough to support your loan. A final underwriting will take place that involves analyzing the appraisal report and your ability to repay the loan to determine our risk as a lender.
Once your loan has been approved, the next step is to decide whether you will lock your rate with your loan advisor. Locking in your rate ensures that your interest rate won't increase before you close your loan. Rate lock options include 30, 45, or 60 days. However, locking may not be the right choice for you, so we should look at your options so you can make the best decision.
I will contact you to schedule a closing date. Closing is not very complicated, but you'll need to understand the various steps and fees involved with the process.
Here's a list of the costs which may apply when closing your loan. Costs may vary depending upon individual borrower situations and state, county or local specific laws:
- Mortgage fees
- Administrative fees
- Application fees
- Appraisal fees
- Survey fees
- Loan origination fees
- PMI
- Points
- Title Insurance
- Credit report cost
- Future interest payments, depending on the loan terms
- Title fees
- Title transfer fees
- Recording fees
- Recording fees
- Additional state or local taxes (could include property taxes)
- Insurance
- Homeowner's insurance
- Flood insurance, if required by law
- Other professional fees
- Attorney fees
- Escrow company fees
- Closing company fees
Key Closing Documents You'll Receive
HUD-1 Settlement Sheet
This itemizes the services provided and the charges to the buyer and the seller. You should be allowed to review this form shortly before your closing meeting so you know your closing costs in advance.
Truth-in-Lending (TIL) Disclosure
You should be mailed your initial TIL disclosure within three business days of applying for a home loan. It outlines the costs of your loan and discloses the annual percentage rate (APR) and other terms of the loan, including the finance charge, the amount financed, the payment amount and the total payments required. Since it's possible that the APR calculated at the time of your loan application will change a little before closing, your lender is required to give you the final version of your TIL disclosure at or prior to the closing meeting.
Deed of Trust or Mortgage (also known as the Security Instrument)
This document conveys a lien in your property as security for repayment of your home loan. (This means that if you default on your loan, your lender has the right to foreclose your ownership interest and take possession of the property).
The Note
The mortgage (or promissory) note represents your promise to pay the lender according to the agreed terms. It includes the dates on which your home loan payments must be made and the location to which the payments must be sent.
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