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I don't know about you but when it comes to contracts whether that's like a gym membership or a home loan I used to sign without getting into the details and that's bad never do that don't be welcome back to the red desk let's talk about two very important very similar but also very separate documents the loan estimate and closing disclosure two documents you need to evaluate your mortgage before you sign on the dotted line all the Nitty Gritty details on payments and these are tucked into these documents and sent to your desk or inbox my desk sounds cooler a loan estimate is a three-page document that gives you an idea of what your loan will look like the mortgage costs interest rate all the fees cash it will take for you to close and so on think of it like a best guest overview of your loan or an informal offer that lenders give you early on just to see if you're interested ever heard someone say shop around for a mortgage don't just settle for one well loan estimates are actually how you compare them you go around collecting loan estimates of similar types look at the breakdowns and then choose your favorite a closing disclosure is similar except it's the actual numbers and has even more information no more estimates this is the real deal once you close you are stuck with what's on this page or five pages it's got everything you need to know about your loan like literally everything your lender is required by law to give you your closing disclosure at least three business days before closing to give you enough time to review it listen carefully this is important reviewing your closing disclosure and comparing it to your loan estimate is a must maybe the most important thing you do in the whole buying process it's the test drive sampling wine at a restaurant before ultimately ordering the bottle anyway make sure you understand everything no excuses speaking of which here's an idea of what you'll see in a closing disclosure you've got your Basics the date why you're taking out the loan and the loan length loan links are usually 15 or 30 years but not always your goods from rocket mortgage lets borrowers choose anywhere from 8 to 29 years which I think is pretty darn cool interest in New York age check out the link in the description for learn more anyway where was I oh right closing disclosures look for your loan interest type fixed or adjustable and what type of loan it is like conventional FHA jumbo and so on by the way we have videos on all this stuff so if you're drawing a blank on any of these terms get some popcorn and go binge our channel that way we can spend even more time together then you've got the loan terms the use of the details you need to pay close attention to they cover how much you'll pay and for how long you've got the loan amount after your down payment fees and other costs if this higher than your loan estimate and you aren't sure why ask your lender then you'll see your interest rate your monthly principal and interest amount not including any private mortgage insurance or escrow payments and any prepayment penalties projected payments is just a breakdown of your monthly and yearly payments and fees in as much detail as possible besides the basic principle to interest payment breakdown you will see any payment changes if you have an adjustable or variable mortgage your estimated total monthly payment in colluding estimated taxes and insurance and a breakdown of what you're responsible for paying if you aren't using an escrow account the last section you'll see is a whole list of closing fees these add up to around three percent to six percent of the loan amount and include origination fees application fees Mortgage points underwriting fees and inspection fees did I say fees okay there's a few more fees after the ones you'll see a list of miscellaneous fees like initial escrow payments homeowners association fees and miscellaneous government fees after that you'll have a cash to close number that tells you what cash you need to cover all the closing costs you'll see if the seller decided to cover any of these fees for you here these are known as seller concessions and are used as bargaining chips during a sale these costs are broken down into even more detail and the summary of transactions which basically summarizes what the buyer is paying for what the seller is paying for and who is paid for what so far this section gets into the legalese and conditions of your loan you may see the word assumption which is whether or not you can transfer this loan to someone else with little to no change in terms a demand feature which allows lenders to request the payment in full at any time late payment penalties how unpaid interest is added onto the principal how partial payments function how your escrow account is set up and it happens if you just stop paying all together you'll also see other disclosures later on in the document that list out how your State's laws apply to your loan and details on refinancing tax deductions Etc toward the end there's the total cost of your loan and a signature spot to confirm that you've received and reviewed this information keep in mind signing a closing disclosure doesn't mean you're accepting the loan just that you've been given the information that's a lot I know here's the deal when comparing loan estimates just read through them compare monthly payments and cost of interest and make sure the closing costs seem reasonable but when looking at your closing disclosure read every single sentence line and number and analyze everything if there's a term you don't understand look it up rocket mortgage has a huge number of resources including this channel that can help if you notice any surprises between your closing disclosure and the original loan estimate given by that lender know what it is and ask your real estate agent and lender ready to start comparing loan estimates use rocket mortgage to pre-qualify and see what kind of loan you could get right now thanks for checking us out if you'd like to look at more videos just like this you can click right here and as always like And subscribe we'll see you next time