Free Signing Agent Training – Refinance Loans

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Typical Refinance Loan Package

NOTE

Fixed Rate Refinance Loan

  1. Loan Amount
  2. Interest Rate (Fixed)
  3. Payment Start Date and Term of the Loan (15, 20, 25, 30 years).
  4. Monthly Payment Amount, which is principle and interest (P&I). They may have an impound or escrow account, which means that they pay their property taxes and homeowners insurance through the lender.
  5. Prepayment Most refinance loans have no prepayment penalty, which means you can pay your loan off at anytime without a penalty. Some loans have either a 1, 2, 3, or 5 year prepayment penalty.
  6. Late charges Most refinance loans have a 15 day grace period with a 5% or 6% late payment penalty.

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DEED OF TRUST

Mortgage or Security Instrument

  1. Have the borrowers check their names to be sure they are correct. It is very important to have the borrowers sign all the documents as their name appears on the Deed of Trust. If they are using a full middle name or an initial, they need to initial the document with all three initials (first, middle, last).
  2. Have the borrowers check the vesting which comes after their names. (Example: Husband and Wife as joint tenants.)
  3. Have the borrowers check the address of the property on the Deed of Trust and confirm it is correct. 

Most Deeds of Trust have a place for the borrowers to initial on each page, at the bottom right corner.

YOU NOTARIZE THIS DOCUMENT

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RIGHT TO CANCEL

  1. The first date is the DATE OF SIGNING. This date is sometimes printed on the documents and may be correct or may have to be changed to reflect the signing date. You strike one straight line through the incorrect date and write it in correctly. Have the borrowers initial by the date.
  2. The second date is THREE BUSINESS DAYS after the signing date. This date is sometimes printed on the document and may be correct or may have to be changed to reflect the three business days. You strike one straight line through the incorrect date and write it in correctly. Have the borrowers initial by the date. DO NOT COUNT Sunday OR LEGAL HOLIDAY.
  3. Borrowers Sign and Date. Be sure the borrowers DO NOT sign on the line that cancels the loan.

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LOAN CLOSING DISCLOSURE

Consists of 5 Pages

The Loan Closing Disclosure replaces the final Truth in Lending Disclosure and the HUD-1 Settlement Statement, and must be provided to borrowers 3 business days before the scheduled closing of the loan transaction.

Borrowers Sign & Date on Last Page

LOAN ESTIMATE

Consists of 3 Pages

The Loan Estimate replaces the initial Truth in Lending Disclosure and the Good Faith Estimate, and must be provided to borrowers 3 days before the scheduled closing of the loan transaction.

Borrowers Sign & Date on Last Page.

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ESCROW OR IMPOUND ACCOUNTS

  1. This document reflects the amount of property taxes and homeowners insurance. The amount is collected by the lender monthly. 
  2. These items are paid by the borrowers monthly. They are added to their monthly payment. 
  3. The Lender pays the property taxes twice a year and the homeowners insurance once a year. 
  4. These are added to the Principal and Interest (P&I) from the NOTE and are totaled on this document. This is referred to as the Principal, Interest, Taxes and Insurance (PITI) which some like to refer to as the total monthly payment. (You can check for the existence of impounds on the “Loan Closing Disclosure.”)

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NOTE VARIATIONS

ADJUSTABLE RATE NOTE

Adjustable Rate Notes are sometimes a FIXED/ADJUSTABLE NOTE. This type of loan is fixed for a period of time and then changed to an adjustable rate. Most of the time these are given to borrowers that have a credit problem and can only get an adjustable rate note. For example, they may have a 2 year fixed and are planning to convert over to a fixed rate loan over the 2 years period. 

2nd MORTGAGE LOANS

This type of loan is a second loan in addition to the 1st Mortgage. It can be for an addition, revision, landscaping or even a pool/spa being added to the home. It can be a fixed rate or a variable rate loan.

TYPES OF LOANS (New Rules)

Purchase Money Loans, Refinances, Loans secured by 25 acres or less, Loans secured by vacant-land, Construction-only loans, and Timeshare loans.

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NOTARIZED

1. Deed of Trust. Sometimes called Mortgage or Security Instrument.

2. You may see other Documents; Grant Deeds, Quit Claim Deed, Inter-Spousal Agreement, Subordination Agreement, etc.

TYPICALLY NOTARIZED

3. Errors and Omissions, Compliance/Correction Agreement or Limited Power of Attorney. Most of the time only one of these is in a set of documents, but sometimes two are included.

4. Signature/Statement. This represents the standard in about 80% of the Loan Documents. But you may see other documents to notarize.

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