What to Check Before Signing Your Mortgage Documents

Buying a home is an exciting milestone, but signing your mortgage documents is one of the most critical steps in the process. This legally binding agreement will determine your financial obligations for years to come, so it’s essential to review everything carefully. Here’s a checklist to guide you through the key aspects to verify before you sign: * You can always ask your mortgage agent to point out specific items if you’re unable to locate them in the document. They are required to explain all the details to you.

1. Loan Amount and Terms
Confirm the loan amount matches what you were approved for and what you agreed upon.
Double-check the interest rate (fixed or variable) and ensure it aligns with the offer you accepted.
Review the loan term (e.g., 15, 20, or 30 years) to make sure it’s accurate.

2. Monthly Payment Details
Verify your monthly mortgage payment, including principal and interest.
Ensure additional costs, such as property taxes, homeowner’s insurance, and private mortgage insurance (PMI), are accounted for if applicable.
Confirm the due date for payments and any grace periods to avoid late fees.

3. Interest Rate and APR
Make sure the interest rate and annual percentage rate (APR) are correctly documented.
Check if there are any conditions tied to your rate, such as a rate adjustment period for variable-rate loans.

4. Closing Costs and Fees
Review all closing costs, such as appraisal fees, title insurance, and origination fees.
Ensure there are no unexpected charges or discrepancies from the Good Faith Estimate or Loan Estimate you initially received.

5. Prepayment and Penalty Clauses
Look for clauses related to early repayment of the loan. Some lenders impose penalties for paying off your mortgage early.
If you plan to refinance or pay off the loan ahead of schedule, make sure you understand the implications.

6. Escrow Account Details
If your mortgage includes an escrow account, verify how much you’re required to deposit initially and monthly.
Confirm what expenses (e.g., taxes, insurance) the escrow account will cover.

7. Property Details
Ensure the property address and legal description are correct to avoid future complications.
Verify that the names on the documents match your full legal names as per your identification.

8. Adjustable-Rate Mortgages (ARMs)
If you have an ARM, understand the adjustment schedule, caps on interest rates, and potential payment increases.
Make sure you’re comfortable with the worst-case scenario for rate adjustments.

9. Special Conditions or Addendums
Look for any conditions that were added during negotiations, such as repairs or seller credits.
Ensure these are clearly outlined in the agreement.

10. Ask Questions
Don’t hesitate to ask your lender or mortgage agent for clarification if something is unclear.
It’s better to address concerns before signing than to deal with surprises later.

Final Thoughts
Signing your mortgage documents is a significant commitment, but careful preparation ensures you’re making an informed decision. Taking the time to review these details will protect your financial future and give you peace of mind as you embark on homeownership.

If you need help navigating your mortgage process, reach out to an experienced mortgage professional for personalized advice!