By Sandy Gadow
You may have recently closed your real estate transaction and now receive a package of disclosure documents from your lender. What should you do with these documents? Do you need to sign them and return them to the lender?
In most cases, these documents are duplicates of those forms which you already received at your closing. Lenders may be required to send you a duplicate set of some disclosure documents after the closing, just to be certain that you have received all the disclosures required by law. You may receive several disclosure documents such as an "Appraisal Notice," a "Private Mortgage Insurance Disclosure," a "Transfer of Servicing Disclosure Statement," a final "Truth in Lending Disclosure Statement," and a final "Good Faith Estimate of Settlement Costs."
The "Appraisal Notice" will notify you that you have the right to receive a copy of the appraisal report. The "Private Mortgage Insurance Disclosure" will explain to you the benefits of private mortgage insurance, which typically allows the lender to offer you loan programs which require a lower down payment than would otherwise be required. This disclosure will explain to you the difference between "Traditional Mortgage Insurance" (MI) and "Lender Paid Mortgage Insurance." The "Transfer of Servicing Disclosure Statement" will explain that your lender may have the right to transfer your loan payments to another lender. The transfer practices and requirements will be explained in this notice.
A final "Truth In Lending Disclosure Statement" may be sent to you, which will state the annual percentage rate of your loan, the finance charge, the amount finances, and the total of payments. The final "Good Faith Estimate of Settlement Costs" will list the final closing expenses and settlement charge which you incurred in your loan and property purchase. These will include the appraisal fee, the credit report fee, tax related service fees, underwriting fee, yield spread premium to the mortgage broker, courier fee, flood certification fee, processing fee, wiring fee, prorated interest, mortgage insurance premium, hazard insurance premium, city tax escrow fee, settlement or closing fees, document preparation fee, title insurance fee, lenders title insurance fee, recording fee, city and tax stamps, if applicable.
Compare these documents with the disclosure documents you received at the closing. Note which documents contain the final closing figures. Be sure to ask any questions you might have and be sure you are clear as to your payment due dates.
Keep these documents in a safe place. You will need to refer to them when preparing your tax returns or in correspondence with your lender or insurance agent.
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