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Mortgage Loan Documents

Mortgage Loan Documents

    The table below outlines the key loan documents required to close your mortgage.  These documents are typically prepared by the settlement agent (also called a closing agent) and provided to the borrower to review and sign at least three days prior to closing.  The loan documents outline the key terms of your mortgage and property purchase.

    We recommend reviewing all mortgage loan documents carefully before signing them and focus on the Closing Disclosure because it outlines your final loan terms.  You should use the Closing Disclosure to compare the actual terms of the mortgage to the terms proposed by the lender at the start of the process.  If there are significant differences between the final mortgage terms as outlined in the Closing Disclosure and the terms the lender committed to at the beginning of the process, such as an increase in interest rate or closing costs, then ask the lender for an explanation.  You should cancel the mortgage if the discrepancies cannot be resolved. 

    You can cancel your mortgage at any time before you sign loan documents but not after you have signed documents so make sure you are completely comfortable with the  the terms of your mortgage and property purchase before you sign anything. If you cancel, or rescind, your loan, you may be out certain upfront, non-refundable costs and fees. But canceling a bad mortgage and finding a loan with better terms can save you thousands of dollars in closing costs or interest expense.

  • Great Mortgage IdeaPlease note that for a home purchase mortgage, borrowers cannot cancel the mortgage after they have signed loan documents.  For a refinance, you can cancel your mortgage up to three business days after signing loan documents but we recommend that you not sign loan documents if you find any major issues 
  • As illustrated by the table below, there are a lot of mortgage loan documents that comprise hundreds of pages, so the volume of paperwork can be overwhelming.  Despite the number and length of documents, borrowers should take the time to review and understand each one.

    Your Mortgage Note, for example, outlines your loan terms including your interest rate, loan length and key loan features including a potential prepayment penalty. If your loan has a unique feature such as an adjustable or variable rate or interest payment, then your note has an additional rider or addendum that explains the feature.

    The Grant Deed indicates your ownership of the property and is filed with your county recorder office so it is a matter of public record. The Deed of Trust (or mortgage depending on what state you are in) is also submitted to your county recorder office and shows that there is a mortgage lien on the property. The First Payment Letter lets you know when your first loan payment is due, as well as the amount, so that you do not incur a late fee.

    In short, these documents cover every aspect of the mortgage and home purchase transaction so borrowers should spend time reviewing them and making sure they are accurate. This is especially important because most of these are legal documents that are in the public domain.

    • To review examples of these loan documents, click on a document title or icon in the table
Key documents
  • Document that outlines the final, actual terms of the mortgage including interest rate, closing costs and mortgage features
  • Although the lender is legally responsible for the content of the Closing Disclosure (CD), the closing agent typically provides the CD to the borrower
  • The CD must be provided to the borrower at least three days prior to the mortgage closing
  • The legal document recorded by the county government that conveys property ownership to the buyer
Deed of Trust(or Mortgage if you are in the Southern U.S.)
  • The legal document provided by the lender and recorded by the county government that indicates that there is a promissory note on the property
  • Document that outlines the key terms of the mortgage and indicates the borrower's promise to repay the debt
  • Document provided by the seller's lender indicating that the seller is released from his or her mortgage debt and that lender no longer holds a lien against the property (because the seller has paid off his or her mortgage)
  • The first payment letter notes your monthly payment amount, when the payment is due and where to send the payment
  • Rate Details*
    Loan Program:  
    Monthly Payment:  
    Points  More Info:
    Points: Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
    Total Lender Fees:  
    Loan type:  
    Property Value:  
    Loan to Value:  
    Credit Rating:  
    Date Submitted:  
    Monthly Housing Payments
    P & I More Info
    Principal & Interest: A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to the reduction of the principal balance.
    Mortgage Insurance More Info
    Mortgage Insurance: The monthly cost for a policy that protects the lender in case you’re unable to repay the full amount of the loan. It is typically required for loans that have a loan-to-value ratio between 80% to 100%.
    Property Tax More Info
    Property Tax: (Also called "Real Estate Tax.") Property taxes are government assessments on real estate property. With mortgage financing, the local, county or state tax assessment on real estate property is considered part of the monthly housing obligation and typically collected and set aside by the lender ...
    Homeowner Insurance More Info
    Homeowner Insurance: or also commonly called hazard insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.lender ...
    Homeowner Association Fee More Info
    Homeowner Association fee: (HOA) fees are funds that are collected from homeowners in a condominium complex to obtain the income needed to pay (typically) for master insurance, exterior and interior (as appropriate) maintenance, landscaping, water, sewer, and garbage costs.
    (If Any)
    Total Monthly Housing Payments
    Lender Fees
    Points More Info
    Points Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
    Origination Fee More Info
    Origination Charge: A loan origination charge is a fee charged by the lender for evaluating, processing, and closing the loan.
    Credit Report Fee More Info
    Credit Report Fee: Fee charged to obtain an applicant’s credit history prepared by one or all of the three major credit bureaus. Used by lender to determine the borrower’s creditworthiness.
    Tax Service Fee More Info
    Tax Service Fee: A fee charged by the lender to cover the cost of retaining a tax service agency. These agencies monitor the property tax payments on the property and report the results to the lender.
    Processing Fee More Info
    Processing Fee: A processing fee is a charge by the lender for clerical items associated with the loan. Examples of processing include loan set up, organization of loan conditions for underwriting, and preparing required disclosures for the borrower.
    Underwriting Fee More Info
    Underwriting Fee: A fee charged by the lender to verify information on the loan application, authenticate the property’s value, and perform a risk analysis on the overall loan package.
    Wire Transfer Fee More Info
    Wire Transfer Fee: In most cases lenders wire funds to escrow companies to fund a loan. Commercial banks that perform this function will charge the lender so the fee is generally passed on to the borrower.
    (If Any)
    FHA Upfront Premium More Info
    FHA Upfront Premium: A fee paid in cash at the close of escrow or more commonly it is financed into the loan. These premiums are pooled together by the FHA and are used to insure the risk of borrower default on FHA loans. FHA upfront premiums are prorated over a five year period, meaning should the homeowner refinance or sell during the first five years of the loan, they are entitled to a partial refund of the FHA upfront premium paid at loan inception.
    (If any)
    VA funding Fee (If any)
    Flood Fee
    Other Fees More Info

    Other fees could be either additional Administrative Fees that a lender charges or it could be a Flat Fee to cover all lender charges such as: (Origination Fees, Points, Underwriting and Processing Fees, Credit Reports and Tax Service Fees)

    The flat fee does not include prepaid items and third party costs such as appraisal fees, recording fees, prepaid interest, property & transfer taxes, homeowners insurance, borrower’s attorney’s fees, private mortgage insurance premiums (if applicable), survey costs, title insurance and related services.

    Total Lender Fees
    *Actual rates and other information may vary. Sponsored results shown only include participating lenders. The information you enter on this page will only be shared with lenders you choose to contact, either by calling the phone number or requesting a quote.
    Current Mortgage Rates as of December 11, 2018
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    Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Click here for more information on rates and product details.
  • Sources

    Loan Documents:

About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael


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