Before Signing Day
Before Signing Day
- Contact the Escrow Agent and request copies of your completed documents at least one day before your appointment to sign your loan.
- Visit a local housing counselor, an attorney or a trusted family member or friend to review all documents. Make sure that you understand all the terms of the loan.
- Check your Promissory Note:
- Is the interest rate correct?
- Is the payment what you expected and will it include taxes and insurance?
- What is the term of the loan? 30 years? 20 years? 15 years?
- Is there a prepayment penalty? Is there a balloon payment? If you are unsure of the impact of these features, contact a non-profit housing agency or a lawyer.
- If your loan is an Adjustable Rate Mortgage, you should receive an ARM Disclosure or Rider. Review this document. Make sure you understand how often your rate can increase, how much your payment can increase, when the rate will go up, and what the maximum interest rate and the maximum monthly payments will be.
- If a broker is involved, is he charging anything other than a broker fee? For example, is he also charging a processing fee, an underwriting fee, or some other kind of fee of which you were unaware?
- Is there a Yield Spread Premium? Be sure to ask your escrow agent even if you don’t see one. YSP’s sometimes are hard to spot on the HUD-1.
Yield Spread Premiums are fees that lenders pay to mortgage brokers when they sell you a higher interest rate. If you see a YSP on your HUD-1 settlement statement, you may not be receiving the lowest interest rate that was available to you or you may be paying the broker more than you agreed. Don’t be fooled you ultimately are paying for that YSP.
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Be sure to request a copy of:
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All these documents plus others you received at closing make up your personal loan file.
Keep these together with all other items relating to your home in a safe place.
