Purchasing a home? Need a loan to complete the purchase? The cost of the mortgage is a key component in the home purchase process. It is helpful to know the terminology and one must not overlook the dollar savings of the actual down payment amount and mortgage rate (dependent on credit scores).

Down payment will be the integral determination for the loan type: FHA, Conventional, Jumbo, VA, or a Bank’s special product offering, and credit reports.  The down payment will also determine the mortgage strategy of a 1st and 2nd mortgage, and the role the MI (mortgage insurance) plays in the total monthly mortgage cost.

Origination Fees, include: broker (mortgage), originator, Lender, and tax service fees.
Third Party Fees, include: appraisal (a main loan condition), attorney (if needed), settlement (Title), inspection, and credit reports.

Good Faith Estimate (GFE): has been replaced by a new (Oct 15th) loan estimate document that adds up all closing costs and interest rates, and buyer’s first 60 monthly payments, all visible on a front page for disclosure and for easy comparison to other Lender’s rates and costs. Costs include sums for escrow accounts for Lenders to pay tax, insurance, and if needed, HOA.

Loan Estimate form: full costs of the mortgage, including fees and interest
and
Closing Disclosure: details for Buyer/s to expect on closing day.  Loan Estimate and Closing Disclosure forms have replaced the HUD-1 and the TILA (Truth in Lending Act)

More details, click on these links:
Home Buying Institute
Mortgage Costs Explained in Detail

And of course, rely on your Realtor!

Cliff Daniels / Realtor
Active Properties
Boulder Colorado
720 434 1418
cliff@actprop.com