Show We’ve broken down each component of the Closing Disclosure below. Loan TermThis section of the disclosure statement lays out the terms of your mortgage. It provides an accurate snapshot of how much you’ll pay and for how long. It’s broken down into five parts:
Projected PaymentsThis section of the Closing Disclosure breaks down the major components of your mortgage loan and displays how the payments change over the years. It gives you the best picture of what you owe on a month-to-month and year-to-year basis.
Costs At ClosingClosing costs are broken down even further in this section of the document to give you a clear picture of what you’ll pay to your lender during closing. Closing costs will typically be about 3% – 6% of your loan amount. Included at the bottom of the itemized costs, you’ll find the cash to close amount, which is the full amount of money you’ll need to have on hand at closing. The amount listed will be higher than the sum of your total closing costs because it includes your down payment amount. Loan CostsThis portion of the Closing Disclosure is a comprehensive overview of the fees involved in getting your mortgage.
Other CostsThere are other costs that could be wrapped up in your mortgage, including taxes and government fees, prepaids, initial escrow payment at closing and more.
At the end of this section, all other costs are added together, so you get a comprehensive overview. Calculating Cash To CloseCash to close reflects the full amount you need to bring to closing and includes any deposits you’ve already paid to the seller. It will also include how much money, if any, the seller is planning to pay toward your closing costs – known as seller concessions. These are closing costs that you negotiate with the seller to pay. Summaries Of TransactionsThis section is a side-by-side view of the borrower’s and seller’s costs at closing. You’ll be able to see adjustments for any items that are paid by the seller in advance, including fees that the seller has already paid, such as taxes, homeowners association fees and assessments. It also allows you to see what’s due from the seller at closing (such as payoff amounts of all mortgages, closing costs, seller credits and more). At the bottom of this section, there is a full breakdown of the amount due from the seller and the amount due to the seller at closing. Additionally, it displays what you owe and what you’ve already paid prior to closing. Loan DisclosuresThe loan disclosure section will show more detailed information about the conditions of your loan. These disclosures include:
Loan CalculationsThis section tells you how much your loan will cost you over the loan term. In other words, it’ll summarize all the payments you’ll make over the life of the loan, including finance charges, the amount financed and the annual percentage rate (APR). Other DisclosuresIn this section, you’ll find general information about the appraisal (if applicable), contract details, refinance information and tax deductions. All of this is just general information, though it will indicate in your loan whether the laws in your state will specifically protect you from liability for the unpaid balance after foreclosure. Contact Information And Confirm ReceiptFinally, the last section includes the Contact Information and Signature lines. You’ll see the following: “By signing, you are only confirming that you have received this form. You do not have to accept this loan because you have signed or received this form.” In other words, signing the form does not require you to take the loan. What comes after the closing disclosure?Three business days after you receive your closing disclosure, you will use a cashier's check or wire transfer to send the settlement company any money you're required to bring to the closing table, such as your down payment and closing costs. You'll also sign the papers to close your loan.
How do I know if my mortgage will be approved?How do I know if I'll get approved for a mortgage?. Your credit score is above 620.. You have a down payment of 3-5% or more.. Your existing debts are low.. You've had a stable job and income for at least two years.. |