23. Closing Disclosures Page One

by Local Title

As you near the final stages of securing your mortgage loan, it’s essential to understand the information presented on the first page of your Closing Disclosure. Here’s a breakdown of what you’ll find:

  1. Loan Amount: This section outlines the total amount of money you will borrow from the lender to finance your home purchase. It represents the principal amount of the loan and sets the foundation for calculating your monthly mortgage payments and overall financial obligations.
  2. Interest Rate: The interest rate specified on the Closing Disclosure reflects the annual interest percentage you will pay on your mortgage loan. It’s important to note that this rate does not include any fees or charges associated with the loan, which are factored into the Annual Percentage Rate (APR) detailed on Page 5 of the disclosure.
  3. Loan Terms: If your loan includes specific terms such as a pre-payment penalty or a balloon payment, Page 1 of the Closing Disclosure will provide a summary of these conditions. Understanding these terms is crucial, as they can impact your financial obligations and repayment schedule over the life of the loan.
  4. Projected Payments: This section provides a breakdown of your estimated monthly payments over the entire loan term. It includes principal and interest payments, as well as any additional costs such as mortgage insurance and escrow payments. Depending on changes in loan terms, such as adjustments to mortgage insurance, you may see different columns reflecting payment variations over time.
  5. Closing Costs: Summarizing your loan closing expenses, this section outlines the various costs associated with finalizing the mortgage loan transaction. These costs may include appraisal fees, title insurance, attorney fees, and other closing-related expenses. Understanding these costs upfront can help you anticipate your financial obligations at closing.
  6. Cash To Close: The Cash To Close figure represents the additional funds you will need to bring to the closing table to complete the transaction. It factors in your down payment, closing costs, and any prepaid expenses. Ensuring that you have the necessary funds available is essential for a smooth and successful closing process.

By carefully reviewing the information provided on Page 1 of your Closing Disclosure, you can gain valuable insights into the terms, payments, and financial obligations associated with your mortgage loan. If you have any questions or concerns about the details outlined in the disclosure, don’t hesitate to consult with your lender or real estate agent for clarification and guidance.