26. Closing Disclosures: Important Additions

by Local Title

Page 4 of your Closing Disclosure holds crucial details that are specific to your loan, providing essential insights beyond standardized form information. Here’s why understanding this section is crucial:

Assumption

Review whether your loan can be transferred to another individual if you sell or transfer the property. Understanding the assumption terms is vital, especially if you anticipate potential changes in ownership or property transfer in the future.

Demand

Consider whether the lender has the authority to require early repayment of the loan. Knowing the terms related to loan demand can help you prepare for any potential financial obligations or scenarios that may arise during the loan term.

Late Payments

Understand the penalties associated with late payments and the timeframe after which they apply. Being aware of the late payment policy ensures that you can fulfill your payment obligations on time and avoid any unnecessary penalties or fees.

Negative Amortization

Evaluate whether the loan schedule allows for payments that do not fully cover the interest due, potentially resulting in increased loan principal over time. Awareness of negative amortization terms can help you make informed decisions about managing your loan payments effectively.

Partial Payments

Review the lender’s policy regarding partial payments and understand how they are handled. Knowing the partial payment policy can provide clarity on managing your loan obligations and potential implications for your loan repayment strategy.

Escrow Account Details

Examine the details of the escrow account to understand whether you will pay additional property costs through regular escrow account payments or handle them directly. Understanding the escrow account terms ensures that you are prepared for any additional property-related expenses and can budget accordingly.

Consultation and Clarification

If you encounter any terms or details on Page 4 of your Closing Disclosure that are unclear or unfamiliar, don’t hesitate to seek clarification from your lender or real estate professional.

Understanding these additional loan terms and information ensures that you can navigate the complexities of your loan agreement with confidence and clarity.