Mortgage Closing Documents During Mortgage Process
Most people are overwhelmed with how much paperwork that is needed to purchase a home or refinance their mortgage. I’m going to break down some of the primary mortgage closing documents that will be signing during this process. Hopefully this will help you from start to end of the mortgage application process. Mortgage closing documents may seem confusing and many times redundant, however, there are strict rules and mortgage lending regulations with regards to disclosures, re-disclosures, and mortgage loan documents. The mortgage loan approval process is a long process and mortgage lenders need to make sure that all mortgage closing documents are properly disclosed, dated, and signed by all parties.
Mortgage Application Process
First thing I’ll go over is the standard mortgage application a.k.a. the 1003 (Ten 03), or officially known as the Uniform Residential Loan Application. This might be the most important step and the most important mortgage closing documents which can lead to having a smooth and a problem free process or a bumpy, frustrating process. The application includes several important sections that collect your information, personal, your finances, and the details of your potential mortgage. You’ll be providing personal information such as Social Security Number, Date of Birth, Marital Status, and contact information. During this process you will need to provide documentation on your income, expenses, assets and liabilities. You will disclose if you have any pending legal problems or current issues affecting your finances. This along with your credit report will help the lender assess your ability to pay your proposed mortgage.
You’ll also provide information on your home or potential home purchase. Your loan officer should provide a pre-approval/pre-qualification letter that will state the amount of loan you are pre-approved for. This is a top end number and you as the purchaser needs to decide on if you want to max out your purchase and if you can live comfortably with that payment.
Important Mortgage Closing Documents: Good Faith Estimate
Once the application is finished you will receive a GFE which will summarize the costs associated with your loan. Examples on the GFE are the cost for you appraisal, your credit report, title costs and pre-paid items(ex: property taxes and homeowners insurance). The GFE summarizes how much money you will need in your accounts at closing, this includes closing costs and your down payment.
Truth In Lending Disclosure
The TIL is part of the Consumer Credit Protection Act and requires lenders to give information pertaining to Loan Origination fees, payment schedules, the APR, along with the borrowers’ rights to rescind the application within a certain timeframe without being charged. The act requires lenders to give borrowers a GFE within 3 business days of a loan application.
HUD-1 Settlement Statement
This Statement will show you all fees and services associated with closing your loan, which typically will range from 4% – 7% of the loan amount.
The Mortgage Note
This is the document of the mortgage closing documents that you will sign at the closing the states that you promise to pay back the loan according to the terms in which you agreed upon.
Mortgage Trust Deed
The mortgage is the legal document that is transfers the deed to a trustee(third party) to hold a security for the lender. Once the loan get paid off the trustee then transfers the title back to the borrower. The house itself is the lenders security that you will pay back the loan. If failure to pay off the mortgage occurs the lender can sell the house to pay off the mortgage debt.
The seller signs the deed at the closing to transfer ownership to the buyers. Your title will be supplied to you in the form of a copy, because original will be held by the 3rd party until the mortgage is paid off.
Other Mortgage Closing Documents
The statements that says all the information your provided was true. This is where it says you will live in the house and itl be your primary residence. This also will have you sign that you will keep the house in good repair.
This Mortgage Article was written and published by Michael Doerr. Michael Doerr is a veteran licensed mortgage loan originator and Assistant Branch Manager with Gustan Cho Associates. Michael Doerr has extensive knowledge in FHA Loans, FHA 203k Rehab Loans, Reverse Mortgages, VA Loans, USDA Loans, Conventional Loans and Jumbo Mortgages. Michael Doerr is known for helping home loan borrowers with under 620 FICO credit scores and is a mortgage banker and correspondent mortgage lender with no lender overlays. Michael Doerr is also an experienced Commerical and Hard Money Lender and is a Vice President at Hard Money Capital Group, www.hardmoneycapitalgroup.com. Please contact Michael Doerr if you are in need of a residential, commercial, or hard money loan.
Michael P. Doerr
Asst. Branch Manager
Nmls# – 235349
Website – www.gustancho.com
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