Here's what to expect, step by step.
© Copyright 2012 GMAC Mortgage, LLC. All rights reserved. GMAC Mortgage is a registered service mark.
The Good Faith Estimate (GFE) is a document your lender will send you that shows your estimated closing costs. Your GFE will be mailed to you within 3 business days after you apply for a loan, as required by the Real Estate Settlement Procedures Act (RESPA).
Your GFE contains, among other items, important dates related to your loan application, escrow account information, and an itemized list of all the estimated loan and settlement charges (or closing costs).
Learn more about closing costs.
The GFE also includes a chart to compare GFEs from other lenders so you can shop for the right loan for you.
Your GFE is both an estimate of how much money you'll need to bring to closing and a great mortgage shopping tool. Closing costs can vary by lender, so it's wise to compare GFEs from at least two different lenders. Review your GFE and ask your lender about anything you don't understand.
See a sample Good Faith Estimate.
Remember; your GFE is only an estimate. Your final closing costs may be higher or lower than your GFE, depending on your loan program, terms and the interest rate at which you lock your loan.
So how will you know what you actually have to pay? That's all in your HUD- 1 statement.
The HUD-1 Settlement Statement lists your actual costs and fees due at closing. You will receive your HUD-1 at least one business day before your closing date.
Your HUD-1 lists every fee associated with closing your loan. It also includes a chart you can use to compare certain fees in your Good Faith Estimate with the actual closing costs in your HUD-1.
Your HUD-1 is like a receipt of your mortgage loan transaction. Be sure to check your GFE against your HUD-1 and ask your lender about any discrepancies.
Below are lists of commonly requested information you should expect to provide when you apply for your loan. You may be asked for additional documentation, depending on your situation.
Preapproval borrowers can supply this information after they sign the purchase contract.
When you close your loan, you will sign your paperwork, pay any required fees and collect the keys to your new home.
The mortgage fees you need to pay at closing will be included in your Good Faith Estimate. These fees, also called settlement or closing costs, include the costs to approve the loan, fees to transfer the property's ownership and state and local taxes.
| Fee | What it's for | Charged by |
|---|---|---|
| Appraisal Fee | Cost to have an independent appraiser determine the property's value. | Third party |
| Attorney fees | Fees to transfer the property's deed to the buyer and pay outstanding taxes, utilities and remaining closing costs. | Attorney |
| Closing fee | This fee it typically paid to the title company or attorney for conducting the closing. | Closing agent or attorney |
| Credit report | Fee your lender charges to pull and review your credit report. | Credit reporting agency |
| Deed recording | County clerk's fee to record the deed, the mortgage and to transfer the property tax billing information to the buyer. | Local Government |
| Discount points | Charge for points purchased to lower an interest rate. | Lender |
| Document preparation fee | Fee to prepare the documents required to close a loan. | Lender or a Title company |
| Flood certification - life of loan | Cost to have your lender track any changes that may occur to your property's flood zone status over the life of your loan. | Third party |
| Flood determination fee | Cost for a flood determination company to tell your lender whether or not your house is located in a flood zone. | Third party |
| Home and pest inspection fee | Cost of inspection to ensure the property is structurally sound and free of termites and other destructive pests. | Third party |
| Homeowner's and hazard insurance fee | Prepayment for 1st year of home insurance, which is required to cover the property if it is damaged or destroyed. | Third party |
| Lender's title insurance | Insurance fee to protect the lender from damage or loss if there is any problem affecting the property's title, such as a lien or claim against it. | Title company |
| Mortgage recording charges | County clerk's fee to record the mortgage and to transfer the property tax billing information to the buyer. | Government |
| Origination Fee | Administrative fees for evaluating, processing and approving a loan. | Lender |
| Owner's title insurance | Insurance to protect you (the policy holder) from damage or loss if there is any problem affecting the property's title, such as a lien or claim against it. | Third party |
| Prepaid interest | Interest you pay on your loan from the day you close to the date of your first scheduled mortgage payment. | Lender |
| Private mortgage insurance (PMI) | A monthly fee you may incur if you make less than a 20% down payment on your loan. PMI protects the lender if you default. | Insurance company |
| Processing fee | Cost to process documents such as application and credit report. | Lender |
| Property taxes | These include school, municipal and/or other taxes required by the government. Taxes can be paid by the lender through funds accumulated in an escrow account or the borrower can pay them directly in full on their due date. | Government |
| State tax/stamps | Tax charged by state or local governments for securing a loan for a property. | Government |
| Survey fee | Covers the cost of a property survey to define the property's size and boundaries. The survey also ensures that there are no easements or encroachments that might affect the legal title. | Third party |
| Tax service fee | Fee paid to your loan servicer to set up and service your escrow account. | Loan servicer |
| Title insurance | Insurance to protect you (the policy holder) from damage or loss if there is any problem affecting the property's title, such as a lien or claim against it. Separate policies are usually issued to the lender and the borrower. | Third Party |
| Transfer taxes | Tax charged when a real estate title is transferred from one owner to another, from the seller to the buyer. Transfer taxes vary by state. | Government |
| Underwriting fee | Fee to have an underwriter, or risk assessor, evaluate your loan application and determine if it is approved. The underwriter reviews your credit report, employment history, financial documents and appraisal. | Lender |
Here's what to expect, step by step.
Learn about the different types of mortgage programs and get the latest interest rates. Prepare yourself before going any further in your loan process:
When you apply for a loan you will be asked to provide documents about your finances and the home you wish to buy or refinance.
You may need to provide:
See the complete document checklist
No matter if you need to get prequalified, preapproved, or apply for a loan, we'll be here for you.
Simply fill out and submit the form and an experienced Loan Specialist will call you back to get more details and help you find the right loan to meet your needs.
Or if you'd prefer, you can call us now at 1-877-941-4622 (see hours of operation). Either way, an experienced Loan Specialist will guide you during the process of getting your new home loan or refinancing.
| REFINANCING | HOMEBUYING | |||
|---|---|---|---|---|
| LOAN APPLICATION | PREQUALIFICATION | PREAPPROVAL | LOAN APPLICATION | |
| What it is | Loan application to refinance your home loan | General estimate of home loan amount and monthly payments that helps homebuyers set their buying budget | Preapproval for a loan amount and program that allows homebuyers to:
|
Loan application to get a home loan |
| Information Collected | Information often reviewed:
|
Information often reviewed:
|
Part of the information often reviewed:
|
Information often reviewed:
|
| What you get |
|
Letter estimating how much you may be able to borrow | Official letter that states that as long as you meet certain conditions, you will be approved for a specific loan amount and program |
|
| get started | get started | get started | get started | |
During the initial review, you will be assigned a Loan processor who will work on your loan all the way through to closing. Your Loan Processor will organize the paperwork and help make sure all the documentation is complete to prepare your application before the final review.
After we have gathered all your documentation, underwriters review your loan package to make sure it fits the guidelines required for your loan program. They evaluate the loan application and make the credit decision. In some cases they need more information to make their decision. We will contact you and help you with the additional materials if requested.
Once your loan is approved, a closing date can be set. Prior to the closing, the HUD-1, your final settlement statement, is delivered to you for your review. The HUD-1 outlines all the costs of your loan so be sure to look it over and contact your Loan Specialist if you have any questions.
Typically at closing, you will review and settle any credits and costs such as the closing costs, earnest money deposits, taxes, escrow and insurance if applicable.
If any costs were higher or lower than expected, it will be reflected on your HUD-1 statement. Before going to closing, be sure to double check and get costs clarified by your Loan Specialist.
At the closing, you spend the majority of your time reviewing the closing documents with the details and terms of your loan - and signing your name. Ask your Loan Specialist or Closing Agent if you have any questions about what you are signing to ensure you are comfortable with and understand the aspects of the transaction.
A few of the documents you review at closing:
Refinancing? You may be able to close from your home or office. Ask your Loan Specialist if electronic signing is available in your area.
You've closed your loan. If you're buying, it's time to move into your new home. Refinancing? Welcome home (again).