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These costs are paid to outside parties and YOU are free to shop and compare providers for a variety of services. These might include pest inspection, or  a survey to verify property lines or a range of Title-related services.

Title services might include:

• a Lender’s title policy, which protects their legal interest in their loan collateral- usually the property itself
• settlement agent fees, paid to the individual or company responsible for facilitating the final transaction
• Title Search, which clarifies and documents legal ownership of the property
• a title insurance binder, which allows potential future use of the current title search results, conditions and exclusions for a short period to lower the cost of future title insurance.

If you select service providers from the list provided by the lender, their fees cannot change by more than 10% between the Loan Estimate and the final Loan Disclosure. If you select other providers the lender is not responsible for changes in those costs.

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These costs are paid to outside parties, not the lender, but you don’t get to choose them. They may include:

• appraisal, which puts a value on your property on the lender’s behalf
• a credit report on you
• fees to assess flood risk of your property, or for ongoing monitoring of flood zone changes related to your property
• tax monitoring to keep track of your property tax payments
• tax status research to assess the state of tax payments on the property.

While you can’t shop for these services, the price for these services in your final loan disclosure MUST match the price on the Loan Estimate; items in “Cannot Shop” have 0 tolerance for change.

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Closing costs are fees paid when the title of the property is transferred to the buyer making them the legal owner.

Origination Charges are fees collected by the lender for the loan process. They may including fees for handling the loan application and “Origination Fees”, which are compensation paid by the creditor to the entity that originated your loan.

“Points” are fees paid to lower interest rates; points are considered prepaid interest for the buyer, and are usually tax deductible.

Finally, Underwriting is a payment to the lender for their assessing the risk that the loan might not be repaid, based on the loan specifics and your financial characteristics.

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The first page of your Loan Disclosure shows the Loan Terms Projected Payments and Costs at Closing.

The Loan Amount, of course is the total you are borrowing. But the Interest Rate alone doesn’t represent all of your borrowing costs. The APR figure on Page 3 shows that.

Likewise, Monthly Principal & Interest aren’t the complete amount you will actually PAY each month.

The Projected Payments figures add other costs, such as Mortgage Insurance Estimated Escrow, Taxes, Insurances and Assessment to show the approximate amount you will pay each month, over time.

The Estimated Closing Costs are directly loan-related. while the Estimated Cash to Close adds other known closing costs to tell you the estimated cash you’ll need to have to close this loan.

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If an eligible loan proceeds from Estimate to closing, creditors must provide a Closing Disclosure form documenting the actual transaction terms and costs THREE business days before consummation. It must be in writing, whether paper or digital, and disclose ONLY the information specified by the CFPB.

If terms or costs change prior to consummation the creditor must provide a corrected disclosure containing the updated terms. In some cases, this may require an additional 3-business-day waiting period to consummation.

Consummation and Closing are legally distinct although they may occur at the same time depending on applicable State laws. Consummation occurs when you become contractually obligated to the CREDITOR on the loan not, for example, the real estate seller. The Disclosure must be delivered three business days prior to the legal Consummation date.

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Yes, if circumstances change, such as:

• a natural disaster damages the property or affects closing costs
• the title insurer providing the estimate goes out of business during underwriting
• new information on you or the transaction affecting settlement is discovered.

If any of these events change 3rd-party charges beyond the 10% tolerance limit creditors may issue a revised Loan Estimate.

If a creditor issues a Loan Estimate they are presumed to have collected all 6 pieces of required information. They may not claim a change in circumstances by receiving one of these pieces of information AFTER issuing a Loan Estimate.

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Creditors are generally bound by the initial Loan Estimate. They are permitted to provide a revised Loan Estimate only under certain changed circumstances. These include circumstances that:

a) increase settlement charges beyond the legal tolerance limits

b) affect YOUR eligibility or change the value of the loan security.

Also,

c) if the interest rate was NOT locked and the new rate changes points or lender credits

d) for settlement delay on new construction loans within the stated revision window – typically 60 days, or

e) if YOU indicate an intent to proceed more than 10 business days after the Estimate or request loan term revisions.

Changed circumstances are extraordinary events beyond the control of you or the lending parties, OR changes or inaccuracies revealed in the information the lender used in preparing the Loan Estimate, OR new information on you or the transaction that the creditor did not use in the Loan Estimate.

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If the amount you pay at closing exceeds the amounts disclosed on the Loan Estimate – beyond tolerance limits for each category – the creditor must REFUND the excess to you no later than 60 calendar days after loan consummation.

For charges subject to a 10% cumulative tolerance fees greater than 10% of the Loan Estimate for the same charges must be refunded.

For fees paid for 3rd party services which the creditor did NOT permit you to shop the FULL amount over the estimate must be refunded.

For charges subject to ZERO tolerance including fees paid to the creditor mortgage broker or their affiliates any amount beyond the Loan Estimate must be refunded.

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Yes, within defined limits.

Service charges for which YOU shop and select a provider may change; the creditor is NOT responsible for providers who are NOT on their written list.

In addition, prepaid interest, property insurance premiums and escrow or reserve deposits may change without legal tolerance limits.

Charges for recording services, and 3rd-party services ON the creditor list, grouped together may not exceed the Loan Estimate total for the same charges by more than 10%.

Transfer taxes, fees paid to the creditor, mortgage broker or an affiliate of either and fees paid to a 3rd party for services the creditor does NOT permit you to shop are ZERO tolerance and must match the Loan Estimate.

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The Loan Estimate documents the essential facts and terms of an approved real estate loan. It includes:

• loan terms
• projected payments and loan costs
• cash and costs at closing time
• the services for which you CAN and CANNOT shop in relation to the loan
• summary information with which to compare this loan to others

and other important details such as appraisal, insurance, late payment, refinancing, loan assumption policy and whether this lender intends to service this loan.

The Loan Disclosure is a dynamic form; it will include information that IS related to YOUR loan and may leave out information that is NOT so forms from different lenders or for different loans may not look identical.