When you are closing on your home, your lender will give you a Truth In Lending Disclosure(TIL).
What is in a TIL?
1.Your annual percentage rate (APR) is shown in your interest rate. This is your rate as a year, not monthly.
2. It will also show you what you will pay if you never prepay on a loan. So, you could have a loan amount of $168,567.28 for a 30 year term. What you will actually pay on this loan (assuming you do not prepay) is $317,136.06. That is a BIG difference.
3. It will show you the amount of payments you are responsible for.
4. It tells you if you are able to prepay on your loan (always a good idea because when you prepay, you are paying down your principle.)
5. It tells you if your loan is assumable.
6. It will tell you what your prepaid interest is (because when you close on a loan, you do not pay the first month's payment.)
7. It tells you what your home owner's insurance (hazard insurance) payment is.
8. It tells you what your county property taxes are.
9. It gives you the adjustment (what the lender owes you if they over disclosed on costs).
Always ask your lender to explain these items before signing. In order to properly manage your loan, it is important to know the details of it. Make sure you are educating yourself by asking your lender questions. Your loan officer should never be too busy to answer your questions.
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