Paperwork to Expect from Your Mortgage Lender
Whether you’re just shopping around for mortgages or are in the last stages of preparing to buy a house, it’s going to feel like your life revolves around paperwork. There’s paperwork you have to send, and paperwork you have to wait for. Within three days of applying for a mortgage, your lender is required to give you – or at least put in the mail – your Good Faith Estimate, or GFE. There are, of course, other pieces of paperwork to expect during this time, as well. Here’s what you need to look for in the coming weeks.
Good Faith Estimate
This is one of the most important pieces of paperwork that will help you choose between different lenders. It basically lists estimated costs for things like underwriting, inspections, taxes, surveys, notaries, attorneys, and more. All these fees can add up to about 3% to 5% of the price of your loan, so these can spell some major fees for you as you close on your home.
Comparing GFEs is one of the primary ways you can get a better deal with the lender of your choice. Some items on the list will be pretty much the same from one lender to the next, such as recording fees and tax stamps that are charged by state or local governments. Other fees will really come from third party organizations. Your lender is supposed to shop around for these items, which include title examination, inspection, etc., and then pass them on to you directly. Lenders who want to get your business by giving you lower costs will shop around for the best prices here.
There are some fees that the lender controls directly. This is where you’ll get the most variation from one lender to the next. These include fees for the mortgage broker, assumption fees, processing fees, and wire transfer fees. Many times you can negotiate with lenders on these fees.
Keep in mind that your GFE is only an estimate. Your actual closing costs can be a little different from what’s listed here. However, if you’re working with a responsible lender, your fees should be pretty close to the estimate.
Truth In Lending Act Paperwork
The Truth in Lending Act – or TILA – requires that your lender give you paperwork disclosing the exact terms of your loan. It will include things like your APR and other terms and conditions that the mortgage lender is offering.
Some of the fees a lender will charge don’t have to be included on your TILA. If you’re comparing lenders, it’s important that you ask for a complete breakdown of the costs. Some lenders may include things like appraisal fees while others won’t. Having your costs broken down for you means that you’ll understand every little thing that’s going on with your fees and will be able to compare lenders more effectively.
Servicing Disclosure Statement
This is basically a statement from the lender letting you know if your loan is likely to be sold to another servicer in the future. Even if you don’t get one of these statements, you could still end up with another servicer, though.
Affiliated Business Arrangement Disclosure
This is a disclosure form from your builder or realtor if you’re working with them on financing. The form basically tells you that you’re allowed to shop for mortgages elsewhere, too.
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