Categories
Make Money From Home

Closing disclosure: What it is and how to read it | Mortgage | Chase – Chase News & Stories

Whether you’re buying a new home or are looking to refinancing, before your mortgage becomes a binding agreement, you’ll receive what is called a closing disclosure. Your closing disclosure will include all the nitty-gr…….

Whether you’re buying a new home or are looking to refinancing, before your mortgage becomes a binding agreement, you’ll receive what is called a closing disclosure. Your closing disclosure will include all the nitty-gritty details of your mortgage, from the borrowed amount to interest rates, closing and everything in between. You’ll want to read this document carefully before signing the dotted line.

Closing disclosures, and really any legal document, can be tricky to decode — especially if you’ve never read one. Fear not! Before getting overwhelmed and potentially missing crucial details of your loan, this article will break down each part of a closing disclosure. Still need help? You may want to hire a real estate professional to help go over any documents involved in buying or refinancing a home.

What is a closing disclosure?

A closing disclosure is the final document given to a borrower by their lender that encapsulates all details of their loan. This is what you’ll look over and sign to make your mortgage official. The form is usually about five pages long and has information about your purchase price, interest rate, fees, taxes, and all other terms and expenses. You are given three days to look over and sign your closing disclosure. This gives you time to correct any mistakes or items that don’t align with the original agreement. 

Decoding closuring disclosure terms

Understanding your closing disclosure is imperative. Reading and understanding the fine print will help avoid any discrepancies or unfair clauses. We’ve broken down each page of a closing disclosure, as well as some key terms to remember:

Page one: Loan term and projected payments

The loan term section discusses how long you’ll be paying off your loan and how much you’ll be paying each month. It’s broken down by the following terms:

  • Loan amount: The amount of money you are borrowing from your lender, not including fees, interest and insurance premiums.
  • Interest rate: Expressed as a percentage, your interest rate is the amount your lender charges for borrowing money. It is an annual amount that is dispersed throughout your monthly payments.
  • Monthly payments (principal and interest): Your monthly payments will cover principal and interest. Principal is a portion of the borrowed amount you’ll pay each month while interest is the portion of your annual interest that you pay each month.
  • Prepayment penalties: Any penalties your lender may charge for paying your mortgage off early.
  • Balloon payments: Some mortgages are set up with lower monthly payments and one big payment at …….

    Source: https://www.chase.com/personal/mortgage/education/financing-a-home/closing-disclosure

Leave a Reply

Your email address will not be published.