One of the most important documents that one receives in the loan signing process is called a Closing Disclosure. This is a five-page document that the lender will provide three days before the final closing.
The Closing Disclosure will include the final loan terms and closing costs. Some of the information that you will find on this statement includes the loan amount, the interest rate, monthly principal and interest, whether there is a prepayment penalty, and closing costs fees. The first page of the statement will always include the loan term, that is how long the length of your loan is, what the purpose of the loan is such as a refinance, what product the loan is for example a fixed rate, and the loan type, such as a Conventional or Va loan.
It is very important that the signer checks the information on the Closing Disclosure. Some very basic put important items to check are the spelling of your name, the loan term, loan purpose, loan product, and loan type. These figures should match the Loan Estimate that was most recently provided to you. The loan amount, interest rate, monthly principal and interest should also match the most recent Loan Estimate that you received. Also, verify that there is no prepayment penalty and no balloon payment. A balloon payment is a lump sum that is paid at the end of a loan’s term.
When reviewing this statement, one should also look to see if there were any new services listed that were not listed on the Loan Estimate form. If you are finding any discrepancies one should reach out to their lender immediately to clear up any confusion and inquires pertaining to this very important form. The lender’s contact information can be found on page five of the Closing Disclosure.