How to read your loan documents

When you are buying a home there's a lot of paperwork being sent your way and a lot of information to digest.  Regrettably, financing and the loan process are some of the more confusing pieces of the puzzle.  How do you know you're getting a good loan?  What numbers should you be looking at? What's the difference between the loan estimates and closing disclosures?  

We sat down with mortgage expert Alejandro Juarez of Fairway Independent Mortgage Corporation to make sense of the math.  Check out our exclusive interview:

As Alejandro explains, if you are buying a home you will receive different loan documents as you move through the process. You'll see everything from worksheets, to loan estimates, to preliminary disclosures, and final closing disclosures.  It's important to know what each of those documents mean and how the loan details may change during the process.  

As you are interviewing loan officers and "shopping" your loan to get the best deal possible, Alejandro explains that there are some key pieces of info you should be sure to check so ensure you are comparing apples to apples.  The interview explains the issues in full, but keep your eye on:

• Days of interest,
• Unexplained rate buy-downs,
• Additional origination charges,
• Property taxes and home owner's insurance, and
• Credits from sellers.

And while there's a lot of preliminary numbers that get floated, it's the final closing disclosure that dictates the terms of your actual loan.  As you near the point of closing on your new home, be sure to check out the first three pages.  As Alejandro describes, page one of the final disclosure is a general summary, including your closing costs.  Page two shows you an itemized break down of all of your fees being charged by the lender, and page three includes a comparison of the original loan estimate and the final closing disclosure, along with any credits from the seller.

If you have questions about buying a home or the process, reach out.  We're happy to guide you through your purchase. And for more specific advice about your home loan and how to compare loans, reach out to Alejandro at www.alejandrojuarez.com.