Which Set of Items Appears on a Loan Estimate
Once applying for a loan, it’s essential to comprehend all of the costs associated with that loan. You don’t want to have any unpleasant surprises once you take out the loan and start paying monthly installments to the lender. Fortunately, it only takes a few minutes to go over your loan estimate and see how much everything costs, so you can decide before you sign anything and officially take out the loan.
Line 1: Company information
Name, address, phone number, and e-mail. The first line is always left blank in M.S. Word.
Line 2: Loan type
You want to receive the type or types of loans from your lender. The most common loan types are: _________, ________, and __________. Many lenders offer more than one type of loan. For example, you might be able to choose between an adjustable-rate mortgage (ARM) and a fixed-rate mortgage. Speak with your lender unless you have every query about which type is best for you.
Line 3: Amount requested
$_______________ This is your total amount you’re asking for. It will likely be less than your final total after taxes and fees are taken out because interest rates change based on your credit score, equity, and other factors. Line 4: Total existing debt:
$_______________ The lender will want to know how much money you currently owe, so keep track of all debts before beginning to apply for loans.
Line 4: Property location and lender name
The exact address and name of your lender should be typed here. Some brokers prefer to use P.O. Box for a lender’s speech. Still, it’s not advised since a borrower can’t serve legal process at that location, so adding either an address or phone number (or both) is preferred here. If multiple lenders are listed, type each one with its line.
The same holds for various phone numbers;
enter them in separate lines and make sure you have line breaks after each new one entered into Line 4 (see Item 14). When filling out Line 4, click Save changes before moving onto the next item—the total amount owed (Line 5).
Line 5: Property address
The property address is self-explanatory. It includes street number and street name, city, state, and zip code. Include additional information if necessary.
For example, if your loan is for land only, include land only in parentheses after the address. If your address consists of a complex system for house numbers (such as in London), clarify it here. Listing your property’s location by map coordinates also helps.
Line 6: Borrower’s contact information
A recent photo identification (the most current available) and contact information for at least one borrower. An e-mail address and cell phone number are preferred so we can communicate with you easily.
You need to provide at least two telephone numbers, one home and one cell. It is also very helpful if these telephone numbers have answering machines or voice mail so that we can leave important messages for you in case we cannot reach you by phone.
Line 7: Property use, purpose, and rent paid to owner per month
Real estate agents and mortgage brokers use these figures to determine if an appraisal is necessary, how much it will cost, and what kind.
For example, a rented condo may have higher insurance costs than one with tenants because it has more things that renters can damage. Another factor impacting an appraisal is whether a unit will remain owner-occupied or become income property upon sale (its resale value).
Finally, property purpose and current rent paid to the owner are all estimates for lenders to make future assumptions about unit size: The greater a dwelling’s square footage, the more valuable it is—and appraisals take into account major renovations or additions over time.
Line 8 a : Down payment amount from borrower’s funds (1st-time Applicants only)
If you plan to put money down, enter it here. Suppose you do not have enough money for a down payment or use gift funds for a down payment. In that case, you will need to see one of our pre-loan counseling specialists at a Neighborhood Assistance Corporation of America (NACA) office to find out how much they can give us as gift funds.
Usually companies do not accept more than $3,000 in gifted funds. Gift funds must be provided by someone unrelated to you.
Line 8 b – Down payment amount from a third party (1st-time applicants only)
Put it here if you are receiving a gift or subsidy to help with your down payment. Include the name and contact information of the third-party giver. For example, if Grandma is giving you $20,000 towards your down payment and you plan to use $10,000 towards closing costs, go ahead and enter her gift amount as $20,000.
Lines 9a through 9f – Lender’s contact information, account number, and authorization letter (if necessary)
Write down your contact details and a statement which will be decided to apply towards the principal if an estimated payment is received before closing. Again, make sure you have signed authorization from your client for you or their lender to do so.
Lines 10 through 15 – Transaction date: This should match your settlement date.
Lines 10a through 10f – Borrower’s contact information, account number, tax identification number, and authorization letter (if necessary)
This information is required to help keep you informed and up-to-date about your account. The lender may also need it if there are any problems with your account or if they need to contact you for any reason. You should provide current contact information in case we need to reach you.
A Loan Estimate is a one-page summary summarizing important information about your new loan. It’s not an offer for credit but provides enough detail to help you compare different offers from lenders who do business in your area.
A lender must give you two copies of each Loan Estimate they provide within three business days after receiving your written application. You can keep one copy and return the other to them by mail or fax within 14 days.