A mortgage lender will help educate you about home loan estimates and ensure you are receiving the info and costs needed for your unique situation. In this blog, we’ll give an overview of the process of finding and using a mortgage lender in California, and elaborate on how a Loan Estimate plays into getting your mortgage.
When you apply for a mortgage, you have the right to know all of the details surrounding your potential new loan, which would include every fee that may or will be applied, because you deserve to know exactly how much your mortgage will end up costing you. Your lender will send you a Loan Estimate that outlines all of these potential fees and costs. Loan Estimates will include the details of those costs for you, and your mortgage lender is obligated to provide you with a Loan Estimate when you apply for a home loan.
Navigating Your Loan Estimate
The Loan Estimate (which replaced the Good Faith Estimate in 2015) is meant to give you a better sense of what the actual cost of your loan will be and to compare loan estimates from different lenders. The Loan Estimate document can sometimes be difficult to read and understand for those who aren’t already familiar with mortgage lending terminology.
Your mortgage lender can help you navigate your Loan Estimate to ensure you understand the full financial burden of your loan. If you’re looking for a home loan in California, having your mortgage lender assist with reading your loan estimate is highly recommended. We encourage you to contact JVM Lending to learn more about how to obtain your own loan estimates.
What Is A Loan Estimate?
As you begin the mortgage process, lenders are required to deliver a Loan Estimate to you within three days of your loan application.
Loan Estimates help borrowers compare the real costs of their loans against competing offers from different mortgage lenders to ultimately determine which lender is truly offering you the best deal for your loan. Loan Estimate closing costs outline everything from the interest rate to insurance fees associated with your particular mortgage loan.
The reason many people enlist the help of a top-rated mortgage lender like JVM Lending is that Loan Estimates can be tricky to understand. Some lenders won’t list costs the same way or lump services into paying points, which can lead to confusion for all types of homebuyers.
What Does A Loan Estimate Include?
Loan Estimates will include all of the fees you should expect to pay for your mortgage. According to Zillow.com, the loan estimate fees will include:
- Application Fee: This is the processing charge paid when submitting the loan. It may be rolled into other fees.
- Appraisal Fee: Pays for an independent appraisal of the home’s value, which is not the same as the home inspection.
- Attorney Fees: This fee covers the cost for the lender’s attorney to prepare and review all of the documents needed to close your loan. Sometimes the cost for the seller’s attorney is included in this fee.
- Credit Report Fee: This is a charge to have the lender pull your credit history from one or all of the three major national credit bureaus: Equifax, Experian, and TransUnion.
- Discount and Origination Points: Points you may be charged are equal to some percent of the loan amount and would lower the interest rate or cover the costs for creating the loan.
- Escrow Account: Although not really a fee, it is the upfront, prepaid amounts the lender requires in order to pay homeowners insurance, private mortgage insurance and property taxes.
- Flood Certification: If required, you’d have this charge for running a check to verify that the property is not in a flood zone.
- Interim Interest: This is accrued interest from the closing date until the end of the month.
- Survey Fee: This charge covers a survey of the property to verify its official boundaries or property lines.
- Title Search and Title Insurance: The title search includes an examination of deeds, court and property records to determine the legal owner of a home and if there are any liens or claims against the home.
How To Choose A Mortgage Lender
When you decide you want to buy a home, one of the most important decisions you will make is choosing a mortgage lender. We recommend that you find a local mortgage lender who’ll help you evaluate your loan options. Your lender will look at your complete financial picture – from the money you can put down to your monthly mortgage payment range to purchase price – and ultimately help you find your comfortable range for your homebuying budget.
Need A Mortgage Lender or Have Questions?
If you’re buying a home in California and looking for a seasoned mortgage lender who can provide you with a Loan Estimate, JVM Lending can help. We are a locally based mortgage lender in Walnut Creek, CA (in the San Francisco Bay Area) though we service the entire state of California. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us with any of your mortgage-related questions!