Understanding the loan documents:

Residential Loan Application:  This document (when complete) gives us an accurate picture of your whole financial situation.  By signing this form you are stating what you know to be true regarding all pertinent information regarding your financial status.   

Good Faith Estimate:  This document breaks down the costs of obtaining the mortgage, the required pre-paid items, and the required amounts to be deposited in the escrow account.  When comparing costs between lenders it is always best to compare interest rate and closing costs (not including escrow and pre-paid items) to get a more accurate picture of the lender's program. 

Truth In Lending:  This is a Federal form that was created for the consumer to help them better understand the effective rate of borrowing money with closing costs included (A.P.R) and the amount of interest paid over the life of the loan.  This document also sets forth any special clauses like whether the loan has a pre-payment penalty or if the mortgage is an assumable mortgage. 

Servicing Disclosure Statement: This document explains that we are a broker not a bank.  Most banks will service their loans that includes taking your monthly payments, handling your escrow account, and answering your specific loan related questions after your loan has closed.  Up until your loan closes we will be your point of reference for any loan related questions.  After the loan closes however, we transfer all the rights to your loan to the specific lender we chose for you.  From this point on you may contact your lender directly. We transfer 100% of the servicing to the specific lender we approve you with, but please remember if you have any problems with your loan and the lender is not handling it to your standards, feel free to contact us and we will intercede for you.  

Borrower Signature Authorization:  This gives us your permission to verify the information you've given us with your mortgage lender(s), employer(s), creditor(s), landlord(s), bank(s), and any other source we may need to obtain information from.  In other words, this is your written consent that we send to let them know you (their customer) is the person ultimately requesting they respond. 

Mortgage Loan Origination Agreement:  In some circumstances the lender may offer the opportunity for the customer to pay less up front costs in trade for a slightly higher interest rate.  However, this program may not always be available.  By paying points or origination fees you may obtain a lower interest rate and save more money over time.  Please request more information from your loan officer to determine what type of interest rate and closing cost scenario would best suit your needs. 

Right to Receive a Copy of Appraisal:  Every borrower has the right to receive a copy of his/her appraisal once it has been completed and paid for.  

Equal Credit Opportunity Act:  This document discloses the fact that we do not discriminate against borrowers based on race, color, religion, national origin, sex, marital status, age, or for any other matter. 

Request for Copy of Transcript of Tax Form (4506):  This form allows the lender to get a copy of the taxes you filed with the Federal Government and compare them with the copy of taxes we've submitted to them for quality control purposes.  This form is typically only required for self-employed borrowers or customers who are paid on commission. 

Rate Commitment Option:  This form explains our rate lock policy and confirms our conversation with you at the time of application.

Many states also have unique disclosures. For example, my home state of RI has 5 state specific disclosures. Their intent is to make sure transactions have a tangible net benefit, borrowers are educated, they do not participate in "flipping" and that they understand what a "high cost" and sub prime loan consists of.