Two documents tell you almost everything about the cost of your mortgage: the Loan Estimate and the Closing Disclosure. Both were designed to be read by ordinary borrowers, and both are easier to understand once you know where to look. Here is a plain-English guide for Tampa Bay homebuyers.
The Loan Estimate
After you apply, your lender must provide a Loan Estimate within three business days. It is a standardized form, so estimates from different lenders can be compared side by side. Page one summarizes your loan amount, interest rate, monthly payment and estimated cash needed to close. Page two breaks down lender charges, services you can shop for, title charges, government fees, prepaids and escrow deposits. Page three includes comparison figures, such as the annual percentage rate, that help you compare loans.
The Closing Disclosure
The Closing Disclosure is the final version. It must be delivered to you at least three business days before closing, so you have time to review it. It uses a similar layout to the Loan Estimate, which makes it easy to compare the two.
What to Compare
Loan terms. Confirm the loan amount, rate type and term match what you agreed to.
Fees. Look at each section and ask about any charge that increased or that you do not recognize. Some fees are limited by rule, while others can change.
Cash to close. Make sure the total matches what you planned to bring, including deposits you already made.
Escrow and prepaids. Check the insurance and property tax figures against your actual quotes.
Questions Worth Asking
If anything is unclear, ask your loan officer to walk you through it line by line, and ask your title company about the settlement charges. It is much easier to fix an error before closing day than on it. You can also compare loan offers by lining up several Loan Estimates. Read more in our guide to Florida closing costs, or call Josh and Anna Richardson at (727) 888-6650.
This article is general information, not financial or legal advice. Your Loan Estimate and Closing Disclosure show the terms and costs of your specific loan. Your Home Loan Team, NMLS #2072896. Josh Richardson, NMLS #2448184.
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