December 18th, 2017 6:59 AM by Jackie A. Graves, President
more important than ever to shop around, especially since the costs related to homebuying continue to increase. The
Loan Estimate, introduced in October 2015, is intended to ease that process for
borrowers who want to make the mortgage transaction more affordable.
Loan Estimate is given to you within three business days of turning in a
mortgage application. It outlines the various terms attached to the loan,
including your interest rate, estimated monthly payments
and the cash you need to close.
“The (Consumer Financial Protection Bureau’s)
goal with these new disclosures, including the Loan Estimate, is to help
consumers better understand the mortgage process, assist with comparison
shopping and prevent surprises at the closing table,” says Chris Polychron,
2015 president of the National Association of Realtors.
2 of the Loan Estimate gives you an idea of how much it may cost to close on
your mortgage, including the origination fees charged by the lender and other
estimated closing costs.
first two sections on Page 2 — sections A and B — are the most important for
borrowers to understand, says Vicki Bott, past senior vice president of credit
strategy for Wells Fargo Home Mortgage. Here, you’ll find the estimated lender
fees, also known as “origination charges,” and costs for third-party services
that the lender will secure as part of the loan transaction.
cannot shop around for the services listed in Section B. The amounts may vary
by lender. These costs include the appraisal, credit report, flood
certification and tax services.
sections answer the question: “What costs is this specific lender I’m shopping
with charging?” Bott says.
By Crissinda Ponder – To view
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