What is a Loan Disclosure Form? |
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Answer:
A loan disclosure form keeps borrowers informed of all fees associated with buying a new home. This statement includes information such as loan origination fee (cost to acquire a loan), loan discounts, underwriter fee (lender's service charge), credit report fee, appraisal fee, escrow fee, private mortgage insurance, property/hazard insurance, prepaid interest, and loan recording fees. Borrowers pay estimated settlement costs at closing, and mortgage providers must disclose this information to borrowers within three days of accepting their application. Loan disclosure forms also include a Truth and Lending Statement, which provides borrowers with information about the annual percentage rate or APR. The APR discloses the true cost of the home loan, and combines the interest paid over the life of the home loan, plus the cost to acquire the loan. This statement is important because it allows a borrower to compare the cost of a particular loan with the cost of other mortgages. Furthermore, borrowers may use loan information and fees included on the good faith estimate in the comparison process, which can help them determine the best loan. Trackback(0)
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