Loan Estimate and Closing Cost Details Before Closing
More Detailed Mortgage Loan Disclosures for Better Information
The Loan Estimate disclosure has been revised to a standardized document that must be used by all lenders.
This new Loan Estimate gives you an estimate of your settlement charges and loan terms if you are approved for a mortgage loan.
You can visit the Consumer Finance Protection Bureau web page for a complete explanation of the Loan Estimate document.
Take you time understanding the numbers as you can save thousands of
dollars in payments by choosing the best loan for you.
The new form makes several improvements. The loan's main features are clearly stated in plain language. The disclosure includes the amount, term, initial interest rate and total monthly payment. And it's hard to miss many of the potentially troublesome loan terms that tripped up many borrowers who are in trouble today. Can your interest rates rise? Even if you make payments on time, can your loan balance rise? Can your monthly payment rise? All these questions are answered on the first page.
Shopping for a Loan
Only you can shop for the best loan for you. Compare this Loan Estimate and Closing Cost Details with other loan offers, so you can find the best loan. Compare all the offers you receive. When comparing two loans, you should focus on the overall costs (including the interest rate plus your adjusted origination charges).
The origination charges cannot change at closing. And once you have locked in your interest rate, your points and adjusted origination charges cant change nother.
At the closing table, it will probably be easier to compare the estimated costs with the actual charges listed on what's known as the Closing Disclosure form, which now includes a reference to each corresponding fee on the estimate. The Department of Housing and Urban Development's Settlement Cost Booklet provides a line-by-line breakdown of both forms.