Excitement over buying your dream home may have you overlooking the details. Take off those rose-colored glasses when reviewing your mortgage loan disclosures. The devil is in the details and you want to make sure you are entering into a contract you can afford with a lender who follows the law. A lender cannot knowingly provide you with false information. Make sure you review all documents for accuracy before signing. Never knowingly sign an incorrect document to speed up the process.
Your lender must provide you two specific mortgage disclosures before closing on the property: the truth-in-lending disclosure and the good faith estimate. The TIL disclosure provides your annual percentage rate, finance charge, amount financed and the total number of regular payments that will be required. The GFE provides a listing of all fees being charged in relation to your mortgage application, including those at closing -- such as title insurance, taxes and inspection fees. The GFE is only an estimate of what to expect at closing, but it cannot be off by more than 10 percent.
Make sure you review these documents carefully for accuracy before signing. Because the lender is required to provide them, you must affix a signature showing you received them. The lender does not continue on with the mortgage closing until it receives your signature on these documents. Bring any inaccuracies to the attention of your mortgage servicer immediately to avoid delaying your mortgage application.
By signing the documents, you are agreeing to the information contained therein. When the truth-in-lending disclosure is presented as part of a contractual agreement, it is legally binding. Never sign a document you know is false. Doing so indicates you agree to the terms even if it is false. Also, do not sign a document under the promise that the lender will fix it later and again obtain your signature. If the lender knowingly gives you false documents to sign, you cannot trust it to not do so again later.
You receive the truth-in-lending disclosure and good faith estimate within three business days of applying for a mortgage loan. Because you receive these disclosures early on in the process, you want to be completely sure of their accuracy before continuing the mortgage loan process. The information contained in these documents is critical to the amount of money you pay for closing on the loan and over the life of the mortgage.
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