1. Loan Rate and Terms:
Mortgage loan rates and terms are typically defined by the loan type, credit score, and amount of the loan. The interest rate is the amount that borrowers pay to borrow the money and is expressed as a percentage of the principal loan amount. Annual Percentage Rates (APRs) include all of the fees associated with the loan. Origination fees are the upfront fees lenders charge to process the loan.
2. Terms of the Mortgage Loan:
The length of term and payment frequency and amount should all be outlined in the initial disclosure form. The term of a mortgage is usually 15, 20 or 30 years and borrowers will need to provide proof of income before signing for a loan so that lenders can be sure they will be able to make their payments on time.
3. Adjustable-Rate Features:
Some mortgages may have variable rates which means that interest rates can adjust over time based on market conditions. This should be included in the initial disclosures so that buyers understand what kind of rate changes they could encounter over time with their loan.
4. Prepayment Penalty Information:
Some lenders may charge a penalty if the loan is paid off early by the borrower. This should be included in the initial disclosures so that buyers understand any associated costs for paying off their loan before it reaches maturity.
5. Payment Options:
Mortgage payments can be set up to occur automatically each month or bi-weekly, depending on what works best for the borrower’s budget. The initial disclosure should include details about how payments will be made and how much will need to be paid each month or bi-weekly.
6. Insurance Requirements:
Homeowners' insurance typically must be purchased when taking out a mortgage loan, and this should also be included in the initial disclosure form. Buyers should understand the amount of insurance they will need to purchase and any other requirements that may be necessary.
7. Escrow Account Disclosure:
If an escrow account is required, then this should also be included in the initial disclosures so that buyers understand what their responsibilities are with regard to paying taxes and insurance premiums on time.
8. Any Other Requirements Based on Loan Type:
Depending on the type of loan being offered, there may be additional requirements that must be met before closing. These should all be included in the initial disclosure form to ensure that buyers have a full understanding of everything they are agreeing to with the loan.
9. Additional Documents or Disclosures That Must Be Signed Prior to Closing:
In addition to the initial disclosure form, there may be other documents that must be signed before closing on a mortgage loan. These should all be outlined in the initial disclosures so that buyers know exactly what will be required of them at closing.
10. Final Loan Terms, Including Closing Costs and Other Fees:
The final loan terms should be included in the initial disclosure form, including all closing costs and other fees associated with the loan. This provides buyers with a clear understanding of the total cost of their mortgage loan so that they can make an informed decision when signing for it.
