Buying your first home? Many lenders provide affordable mortgage options specifically designed to help first-time buyers. Home purchase is a big and often difficult step; these programs may help. If any of these apply: You have long-term debts You have, or have had, income irregularities Your credit history notes past challenges You have not accumulated enough for closing and down payments First-time buyer programs may be able to help. Talk to lenders early.

One of the more common incentives in new-home purchases is the "decorating allowance." This is an offer to upgrade some aspect of the home before closing, such as carpeting, flooring, or appliances. Since builders are buying such things "at scale" for multiple homes, the perceived value of the incentive may be higher than their actual cost. If you are considering a decorating allowance, ask these questions about the allowance offer: Is the allowance credited at closing, and can it be applied to your closing costs? What purchase terms must your accepted offer meet to qualify for the allowance? Check with the lender you have selected to make sure the terms the buyer is offering are allowed in your loan arrangement. At closing, make sure the allowance addendum is included on loan disclosures. And make the allowance/upgrade is valuable enough to you to tip the balance in such an important decision.

Homeowners insurance — or the paid receipt for it — is required at closing. Shopping for insurance coverage, and comparing plans early in the home-purchase cycle can pay off. Insurance agents and representatives can be a terrific resource for information. They may help you understand how insurance costs differ between properties. They might also have ideas on reducing coverage with additions like home-security systems. Regardless, proof of insurance will be required to consummate the purchase.

Page 4 of the Loan Disclosure is NOT just standardized same-for-every-loan boilerplate. Review Page 4 on your disclosure carefully, including these terms: Partial Payments — what policies does the lender provide? Late Payments — what penalties apply, after what period of time? Negative Amortization — are payments that do not fully cover the interest due allowed? Do they result in increased loan principal? Early Repayment, or "Demand". Can the lender require earlier repayment than originally scheduled? Assumable/Assumption: If you sell or transfer the property, can the loan also be transferred? Escrow Account details — study these to be clear on which costs are covered, and which are not.

Cash To Close — the final money required in-hand at loan consummation. Borrower-to-Seller comparison, line-by-line (if there is a seller in this transaction.) If there is no Seller, a Payoffs and Payments table may be provided instead. This comparison, and the notes, should assist in understanding how the final transaction compares to the original Loan Estimate.

The Loan Disclosure form you will receive (at least 3 days before loan consummation) provides the costs and terms of the loan arrangement. Heres what you can expect on Page 2 of this standard form: Page 2, Section A figures SHOULD match your original Loan Estimate form. These figures include: Discount Points, if applicable. Origination Charges (collected by your lender) Origination Fees (fees paid to loan brokers, loan officers or similar parties) Page 2, Section B figures should be WITHIN 10% of the total from your Loan Estimate. These figures are the services that borrowers CANNOT shop; the lender supplied a list of the parties required for these services. Page 2, Section C figures may vary from the Loan Estimate. Charges from providers on the lenders provided list should be within 10% of the Loan Estimate. Others should be as you arranged with those external providers. Page 2, Section E figures should be within 10% of the matching Loan Estimate figures. Page 2, Sections E-F-G-H figures may vary from the matching Loan Estimate figures. Page 2 also includes a break-out of the costs paid at or before loan consummation: Costs YOU will pay. Costs the SELLER will pay. Costs paid by any others. Credits (if any) from the Lender

The Loan Disclosure details the final costs and terms of the loan arrangement. The form and details are set by regulation; heres what you can expect on Page 1. Loan Amount. The total sum you are borrowing. Interest Rate. The % paid to borrow, not including fees. Terms of balloon payment (if there is one). Terms of pre-payment penalties, if applicable. Projected Payments over the life of the loan, including: Principal & Interets Mortgage Insurance Estimates of Escrow Payments, which usually do change over time. Closing Costs – details of expenses required to close the loan. Cash To Close This form must be provided at least 3 business days before loan consummation.

Regulations require lenders to document the final terms of the loan, and to deliver the document – called the Closing Disclosure – at least 3 business days before scheduled loan consummation. The Closing Disclosure cannot be verbal; it must be a digital or paper document. Any changes after deliver of the Closing Disclosure start the clock again: a new Closing Disclosure must be delivered, at least 3 business days before a revised loan consummation date. In a few circumstances, waiver of the 3-day waiting period is possible, but only when this waiting period would trigger an authentic financial emergency.

The Loan Estimate form addresses one of the big questions for closing: approximately how much cash will be required? Its an estimate, not a final total; heres a short list of the costs that might change, and by how much. Section A - Origination Charges should be the same amount at closing. Section B - Services that you cant shop. Closing amounts should be within 10% of the estimate. Section C - Services you CAN shop. For service providers on the list provided by the lender, the 10% tolerance limit applies. Other service providers arent bound by the estimate, but it does provide some guidance and point of negotiation for these decisions. Section E - The Recording Fees should be within 10% of the estimate. Section F, G, and H: Prepaids, Initial Escrow, and Other may vary from the estimate. Tolerance limits do not apply. These Loan Estimate figures and tolerances, plus basic loan details, Deposit Credits, Adjustments and Down Payment should serve to compute your money-on-hand requirements at closing. When assessing or comparing loans, keep these figures, ranges and tolerance limits in mind.

Mortgage transactions involve taxes, escrow funding and some pre-payments. These costs should be considered in mortgage decisions. They include: Escrow funding, which is frequently required. Escrow funding covers future annual charges such as property taxes, homeowners insurance and mortgage insurance. Recording fees, which government agencies charge for keeping records defining legal ownership. Transfer taxes, which may be levied by municipalities, counties and states for handling the transfer of ownership records. Prepayments, which can include: Homeowners insurance premiums Mortgage insurance (if required) Property taxes for some months, in advance Prepaid interest, for the period from closing to 1st mortgage payment. These costs can vary between Loan Estimate and Closing Disclosure. Ask your lender about the tolerance rules, or watch related videos here.