When your home loan is approved, you should receive two disclosure forms: the Final Truth in Lending Disclosure Statement and the HUD-1 Settlement Statement. The Truth in Lending Act, also known as Regulation Z, requires the lender to provide you with these two disclosures no later than 3 days after your closed your mortgage. You can get a sense of these forms by looking at the Consumer Financial Protection Bureaus provided sample here: http://files.consumerfinance.gov/f/201207_combined_til_hud1.pdf

I wrote a post about the disclosures you should receive after you apply for a mortgage. The disclosures I discussed included the Preliminary Truth in Lending Disclosure Statement, TIL. Whatever changes occurred to fees and cost will be reflected in the Final Truth in Lending Disclosure Statement. Ultimately, if you took the offer proposed by your loan officer, there should be no major changes between these two. The major difference is that you will sign the Final TIL at the time of closing. However, I dont expect you to jump between posts, and again, here, I will go over the information you will find in your Final TIL.

The Final Truth in Lending Disclosure Statement, also known as TIL, includes:

• information that identifies the loan originator and/or lender issuing the disclosure
• information that identifies you (i.e. name, address, phone number, etc)
• the Annual Percentage Rate, or APR: this percentage figure is relative to the amount financed, and it does not represent the interest rate of the loan. Generally, this figure will be higher than loans interest rate
• the Finance Charge: this amount will reflect the interest and charges you will pay for the life of the loan as if you were not to refinance, and as if you were to pay according to the scheduled terms until the mortgage is fully paid
• the Amount Financed: this amount will be less than your loan amount; the difference will be made up of the origination fees (points, lender fees, mortgage insurance, tax service, etc). In other words, the amount financed will exclude the fees related with the transaction, and this number will reflect only the pure home financing amount
• the Total of Payments: this amount includes the Finance Charge, the Amount Financed, and the Mortgage Origination Transaction Fees
• the Interest Rate and Payment Summary: this is a table with the schedule of payments to be made for the life of the loan. For example, if you have a 30-year fixed term loan, you would see a schedule that includes some distribution of 360 payments
• The following are specifications and clauses of the loan:
  • Demand Feature: indicates whether the loan includes any demand features. If your loan HAS a demand feature, this information field will include a description of the clause.
  • Variable Rate Feature: checked if your loan is of variable rate terms
  • Security: the address of the property you will finance
  • Assumption: yes/no; this is a clause limiting your ability to pass the loan to a future buyer of this property
  • Property Insurance: whatever property insurance requirements you may have as it relates to the loan
  • Late Charges: the late payment penalty terms
  • Prepayment: loan prepayment clause; this will establish what happens if you prepay your loan
• section for the signature of all loan named borrowers

The HUD-1 Settlement Statement lists all the final charges and terms of your mortgage loan. Your lender is required to provide you with the HUD-1 Settlement Statement within 3 business days from your closing date. However, if you want to compare the final closing costs with your initial Good Faith Estimate before the closing date, you can request a copy of this Statement a day before the settlement. This Statement will be filled by the settlement agent.

You will find the following information in this Statement:

• Type of Loan Section
  • obviously, the type of loan, FHA, VA, Conventional, RHS
  • identification information about loan
  • identification about you, the borrower
  • identification information about the property
  • identification information about the settling agent
• Summary of Borrowers Transaction
  • Gross Amount Due from Borrower
  • Adjustments for items paid by the seller in advance
  • Amount Paid by or in behalf of Borrower (whatever you are paying with the loan)
  • Adjustments for items unpaid by seller
  • All of these amounts are added/subtracted to total the total Paid by the borrower and the total paid for the borrower with the moneys from the loan
• Summary of Sellers Transaction
  • Gross Amount Due to Seller
  • Adjustment for items paid by seller in advance
  • Reductions in Amount Due to seller
  • Adjustments for items unpaid by seller
  • All of these amounts are added/subtracted to total the Gross Amount Due to Seller and to be paid in cash by the buyer or/and with the moneys from the loan
• Settlement Charges
  • Total Real Estate Broker Fees
• Items Payable in Connection with Loan
  • lender/broker origination charge
  • points fees
  • adjusted origination charges
  • appraisal fee
  • credit report
  • tax serve
  • flood certification
• Items Required by Lender to be Paid in Advance
  • Daily interest charges
  • Mortgage insurance premium
  • Homeowners insurance
• Reserves Deposited with Lender
  • Initial deposit for escrow account
  • Homeowners insurance
  • Mortgage insurance
  • Property Taxes
• Title Charges
  • Title services and lenders title insurance
  • Settlement or closing fee
  • Owners title insurance
  • Lenders title insurance
  • Lenders title policy limit
  • Owners title policy limit
  • Agents portion of the total title insurance premium
  • Underwriters portion of the total title insurance premium
• Government Recording and Transfer Charges
  • Government recording charges
  • Transfer Taxes
  • City/County tax/stamps
  • State tax/stamps
• Additional Settlement Charges
  • Required service you selected
• Comparison of Good Faith Estimate (GFE) and HUD-1 Charges
  • these are three tables that lists side by side the items below, and make it easy for you get a clear picture of the differences between the Good Faith Estimate (the one you should have received 3 days after closing) and this statement:
  • Charges that Cannot Increase
    • origination charge
    • credit/points for the specific interest rate
    • adjusted origination charges
    • transfer taxes
  • Charges that Cannot Increase More than 10%
    • Government recording charges
  • Charges the can Change
    • Initial deposit for your escrow account
    • Daily interest charges
    • Homeowners insurance
• Loan Terms
  • This box will spell out the terms of your loan
  • loan amount
  • loan term (time of the loan)
  • initial interest rate
  • initial monthly amount owed to principal, interest, and any mortgage insurance
  • whether your interest rate can change (adjustable rate mortgage or fixed rate?)
  • can you loan balance rise? If so, what is the maximum?
  • can your monthly payments rise? If so, when? how much? and what is the maximum?
  • is there a prepayment clause?
  • is there a balloon payment? if so, for how much? due date?
  • if there are amount due for items such as property taxes and homeowners insurance, the amount of monthly payments will be included here

These forms are intended to help you understand all final transaction costs, and to clearly spell out the terms of your loan. As I mentioned earlier, you should receive these Disclosures within three days from the settlement date.

These forms conform to current Fair Lending Act, Regulation Z, requirements. However, next year, a new form will replace these forms, and we will be required to use the Closing Disclosure form on the 1st of August, 2014 . You can take a look at a sample of the upcoming form here: http://files.consumerfinance.gov/f/201311_cfpb_kbyo_closing-disclosure.pdf

If you want learn more about the forms you should receive at closing time, and/or right after it, you can visit the Consumer Financial Protection Bureau to learn more: http://www.consumerfinance.gov/askcfpb/181/what-papers-should-i-get-at-or-before-loan-closing.html

At Nations Lending Corporation, we help our branch partners grow their referral business. To help loan officers communicate with realtors and manage borrowers expectations, we are committed to keeping partners in the loop through all stages of the approval process. This is only one of the benefits we offer through our mortgage branch opportunities. Although we are not a net branch company, and offer no mortgage net branch opportunities, our partners benefit from bundled solutions that help them build sustainable businesses. Please visit our website to learn more.