Mortgage loan Check list?
by Mortgage Rates on Thursday, September 30th, 2010 | 2 Comments
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One of the most important is your closing costs. If you are getting your loan from a large bank, you can expect upto $1500 including what you paid for the appraisal.(They’ll sometimes reduce their $1000 lender fee if you haggle over it)
If you are getting your loan from a mortgage broker, you can expect about a 1% loan charge. You might pay more to buy your rate down and if you aren’t paying a point then your rate is most likely higher than what the lender can offer.
You’ll get a document called either a HUD 1 or HUD 1 A statement. It will detail all the charges and who pays what. Make sure the things you don’t pay for aren’t listed in your column. I’ve seen mistakes there several times.
You should have a Good Faith Estimate that has your interest rate, APR, whether or not there’s a prepayment penalty (usually these are on adjustable loans and lines of credit, not on fixed rate loans) and will also tell you if the loan is assumable (probably not) and a few other things. Read this and make sure you understand it before you go to closing.
If you’re refinancing, you’ll get some forms that allow you to change your mind during a 3 day window. If you sign your papers on Monday, Tuesday-Wednesday-Thursday are the days you can rescind your decision and get out of the loan, and Friday the loan funds. This only applies to refinancing. If you’re buying a new home, you don’t have this right of rescission.
A lot of people I talk to thought they were getting a fixed rate, but it was only fixed for 3 years or 5 years. You want to make sure it says fixed for all 30 years, or however long the term is.
If you’re planning to escrow, make sure that’s on there. If you’re borrowing more than 80% of the value, you probably have to escrow and if it’s not there they will come back for it later.
Just remember that once you sign, you can’t change any terms. If it isn’t right when you sign, it will not change. I’m repeating myself, but I’ve heard people tell me that something wasn’t right but they signed anyway thinking they could just get it fixed later…and that won’t happen.