You may have submitted your mortgage application (congrats!), but don’t bid farewell to mortgage-related paperwork just yet. Be on the lookout for these two documents from your loan officer, which will help you understand the true cost of your home loan:
1. Loan Estimate
The scoop: This three page document—which replaced the Truth-in-Lending statement and the Good Faith Estimate in October 2015—provides an estimate of your mortgage loan terms (think initial loan amount, interest rate and monthly payment) and your closing costs. It’ll also outline what services you help shop for, versus those you cannot.
The timing: Three business days after your mortgage application has been received by your lender
Tip: This is the right time to talk to your loan officer if you need to change any loan terms or have questions about your loan fees.
2. Closing Disclosure
The scoop: This document serves as your overview of the closing terms and costs necessary to complete your mortgage transaction, and can be leveraged to identify any costs that have changed from your Loan Estimate. The document replaced both the Truth-in-Lending statement and the HUD-1 Settlement Statement.
The timing: At least three business days before closing
Tip: Carefully review your Closing Disclosure so you know how much cash you’ll need on hand for closing day.
By taking the time to review and understand your mortgage documents, you’ll be ready to close with confidence.