Congratulations, you spoke to several Mortgage Professionals and decided to apply for your home Mortgage through your Mortgage Broker. Now what happens next?  Your Mortgage Professional should have either contacted you prior to signing the application on the documents needed or leave you with a list of documentation you will be required to submit for the approval of your loan.  These documents can vary depending on the type of loan program you apply for. For example: Stated (no proof of income), Bank Statements, etc...

The next step your Mortgage Professional will be ordering an appraisal of your property while still gathering all the documentation that is required. In addition they will also be ordering title of your property to make ensure all liens on the property will be paid. (If refinance your current mortgage will be the debt to be paid, if purchase make sure the seller liens will be paid so you have clean title)

Once the appraisal is done (most of the time) the full loan application will be submitted to the investor. (Lender) At that point the investor has 3 days to send you a package of disclosures. In this package it will disclose who is your end investor along with T-I-L (Truth in Lending) along with a preliminary HUD (closing Statement).  The package will also go over the type of loan you have selected.

Now that you have received this package you should open it and review all the documents. However, please keep in mind this is a FEDERAL Law that the end Lender must send you this package and the majority of the time the documents are generalized and NOT exact to your loan.

                                                            CONFUSED?

The letter that comes along with this package will inform you that you must sign these and return them.  DON'T! Remember you will only have to sign the final documents at your closing.  If the Truth-In-Lending or the Closing statement don't match what was given to you from your Mortgage Broker don't panic. Call and speak to your Mortgage Broker and ask questions.

A recent closing of mine the Closing statement was incredible off from my Good Faith.  I explained to my client to please review the Good Faith that I gave them to the closing statement.  On the Closing statement these are fee's that are standard in the industry if I choose to apply them along with title fee's they maybe charged. I also informed them that the investor has not received my Fee sheet until we get close to closing so they are just going over generalized fee's.

By adding these fee's that where on the Preliminary HUD it will also change the APR of the loan. (Not the Interest Rate) This same client's interest rate was 7.5% with an APR of 7.8% (because of high LTV and low FICO scores) on my Truth-In-Lending. However when they received these papers is showed an APR of 8.6% WOW! Huge difference.

I informed the client a head of time about the package that they would be receiving and that they should look at but they do not have to sign anything because the majority of time it would be wrong and if they have any questions please call.  I told them to remember that they would not sign anything until they see the FINAL documents at the closing table.  To make matters worse the loan that they had applied for came with No-Pre-payment Penalty. In this package it also stated they may have a two-year pre-pay. 

Now, I know if I where the clients the hair on the back of my neck would be raised.  This loan closed with a final rate 7.5 and an APR of 7.8 with NO-Pre-Pay. (Just like my application stated)

In closing, when you receive this package from your investor please remember these are generalized documents and they go over a general view of the loan but are not the final documents that you will be signing.  If you have any questions please call your Mortgage Professional.

For more Info: Mortgage Advice in South Florida                              

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