Congratulations You Just Applied for a Mortgage. Now What? Part II

Congratulations you just applied for your Mortgage through your Mortgage Professional and made it through all those pages of either initialing or signing. Did the Mortgage Professional explain each page to you or did you just sign because it was so many pages you just want it done with?  Almost all of the pages are standard documents throughout out the industry. The two most important that you will be signing are the Good Faith Estimate (GFE) and the Truth-in-Lending (T-I-L) pages.  The following is my approach to these documents.

                                                              Truth - in - Lending

This in my opinion is the most important paper you will be signing.  I will not go into detail on how the APR works other than a roughly to tell you that if you keep the mortgage for the life of the mortgage (15, 20, 30 years) and make all your payments than add all your closing costs in that is how APR works.  The problem with that is the average life of a mortgage is only 4 1/2 years.  (but that is for another post) 

After you signed your application by law the Mortgage professional must give you the T-I-L and the GFE within 3 days of signing your application.  More important you should really read it and understand what you signed.  Don't always believe your Mortgage Professional. 

                                                             What to Look For

Did your Mortgage Professional tell you that you do not have a pre-pay or you do have one?  Their is a box on this document that will say you may or may not have a pre-pay.  Which box is checked? Did your Mortgage professional tell you that you have a 30 year fixed rate than look at your payment schedule. Does is show 359 + 1 Payment or does it show something different.  In addition their is a space on the this document for comments. Please read it.  On the APR box how much difference is their from your interest rate?  If your Mortgage professional told you that you have no points or fee's added to your loan then the APR should be close to your interest rate. (Note Close but not the same)

                                                  Good Faith Estimate GFE

I look at this document as really a break down of everything that is involved in your Home Loan.  Just don't look at the bottom number.

                                                         What to Look For

First off look at all the Lender Fee's they should be disclosed are they charging you points or a fee to do your loan?  Note this is not about being good or bad it just goes to disclosure of the fee's that are involved.  These fee's vary from each Lender and keep in mind if you are using a Mortgage Broker he/she may not know who the end Lender is and therefore they are using an estimate (GFE) for the end Lenders fee's.  In addition look at how much the title policy is. The Mathematical equation for title is .00575.  Unless it is refinance and you have a title credit from having the previous title. (note save all your paper work). One of the biggest items to look for are your escrows. (taxes and insurance)  Did you want to escrow these?  Most areas Taxes are due in November so if you are closing in June make sure your GFE shows a minimum of 7 months of escrows. (unless a purchase if so please consult your FULL-TIME Realtor as to what your contract is for)  Look at your title charges make sure you understand the charges remember this is your money.  Any Mortgage Professional worth their weight will have know problem going over all of these fee's. In Florida, the law states this document can be as much as 1% off of the actual closing statement so make sure you look it over and not just being set up for a big change at the closing table. 

For more Mortgage Advice: Mortgage Advice in South Florida

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