Posts tagged as:

settlement costs

September 27, 2009

Homeowners Insurance

Homeowners Insurance is not only an essential support for you as a homeowner, it is also an unavoidable part of a mortgaging process. You are required to have homeowners insurance on the property you are mortgaging, no mortgage will close without it. The lenders’ concern is obvious – your property is the collateral of their [...]

August 22, 2009

Truth in Lending Disclosure

I have always been wondering why we have two different disclosures (TIL and GFE) to serve one and the same purpose… Why can’t it be just one form with all a borrower has to know? The funniest thing, though, is the fact that both The Department of Housing and Urban Development (HUD – the author [...]

August 6, 2009

Settlement Statement (HUD-1)

The recently introduced new Good Faith Estimate (GFE) form triggered certain changes in the settlement documentation chain. Its long-time associate the Housing & Urban Development Settlement Statement (HUD-1) form has undergone a makeover, too. The guidelines for the usage of both documents went into effect on January 16, 2009, but they will become mandatory only [...]

June 27, 2009

The Good Faith Estimate (GFE)

What good is the Good Faith Estimate you received from your potential lender? Let’s see… At first sight, the information provided seems gold – origination fees, appraisal fees, credit report… you name it! And then you get several Estimates from different lenders, and compare, and think that you have made a fair choice until… well, [...]

June 18, 2009

I had the rate of my upcoming mortgage locked, but the APR presented to me a couple of weeks later was already different (obviously higher!) and proclaimed subject to more changes any time before closing. I mean, how is this possible in the first place?

As many other borrowers, you probably got deceived by the APR’s apparent similarity to the interest rate and assumed that “locking the rate” means locking all the rates involved. Unfortunately for borrowers, that is not the case. The APR does not only include the interest rate and the points, which do get locked, but also [...]

May 14, 2009

Annual percentage rate (APR)

The Annual Percentage Rate (APR) was created with good intentions to make complicated things if not simple, then at least simpler. It even works in many cases! Unfortunately, it also fails in just as many other cases, which sort of devaluates it as a universally reliable tool. The APR looks a lot like an interest [...]