It is exciting to hear that an offer has been accepted, and many homeowners are ready to move into their new houses as quickly as possible. At the same time, homeowners must take the time to review all documents associated with the purchase. Purchasing a house is a major financial decision, and homeowners need to understand what their obligations are. That is where the closing disclosure is critical. What type of information is included in the closing disclosure, and what do homeowners need to know now?
The Closing Disclosure Includes Fees And Costs
First, homeowners need to take a look at the numbers included in the closing disclosure. Of course, the biggest number will be the purchase price. Homeowners will see the amount of money they put down, and they will see the total balance of the loan.
Homeowners should also take a look at the monthly mortgage payment. Understand that this monthly payment may not be the same as the amount of money that is drafted out of the bank account every month. Often, banks withdraw money for real estate taxes and home insurance premiums, holding that money in escrow for the homeowner.
Homeowners also need to take a look at the interest rate. They need to understand whether the interest rate is fixed or variable.
Look At The Terms Of The Loan
Homeowners also need to look at the terms of the loan. They should understand how long it will take them to pay off the mortgage. They also need to understand the consequences of missing a monthly mortgage payment. They need to see whether there is an acceleration clause and whether there is a late fee tied to any late payments. Homeowners must also understand when the first mortgage payment is due.
Talk To A Trained Professional About The Closing Disclosure
There is a lot of information in closing disclosures, it can be intimidating for someone who has not been through this process before. That is why all new homeowners need to work with a professional who can make sure they understand the terms of the mortgage. Homeowners must understand what they are agreeing to before they sign on the dotted line.
Share
FEB
About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.