Summary of Loan Documents

The following is a list of common documents that may be contained in a typical loan package. There are other documents that may or may not be included in a particular loan package.

Please note:

Affiliated Business Arrangement Disclosure:


This document discloses who the lender/broker is affiliated with that may have an interest in or have fees due from this loan such as the Title Company or Document recording company.


Affidavit of Occupancy:

          This document is a certification by the Borrowers that the property securing the Note is either their Primary Residence, a Second Home, or Investment property.


Amortization Schedule:

          This document itemizes each payment due on the Note and shows each payment due date, the total payment amount due, and breaks down the principle portion, interest portion, and if included, the mortgage insurance premium portion, of each payment.


Appraisal Disclosure:


The appraisal disclosure explains the borrower's right to a copy of their appraisal and how to obtain it (if they have not already received it.)


Borrowers (Mortgagor’s) Affidavit:

This document must be signed by the borrower in the presence of a notary public. In the document the borrower attests that they have not done anything to affect the title to property, that they are not the subject of divorce or bankruptcy proceedings, etc. The general purpose is for borrower to state that there have not been any significant changes to their financial situation, ownership status or condition of the property.

Borrowers Certification:

This document that states that the borrower(s) have applied for a mortgage loan from the “Lender”, they understand and agree that the lender has the right to the full loan review process, and fully understand that it is a Federal crime punishable by fine or imprisonment, or both, to knowingly make false statements when applying for this mortgage.

Borrower’s Statement of Information:

This document is to be completed entirely by the borrower(s) and signed. It typically asks for the borrower(s)’ personal information for the last 10 years (employment history, residence history, marital history, etc.) Since this takes some time, it is recommended that this document be saved until the end so that you, the notary, can do your necessary paperwork (i.e., filling out the notary journal, reviewing the signing documents for errors, etc.).

Certificate of VA Eligibility:

This document is issued by the Veterans Administration to qualified veterans which entitles them to VA-guaranteed loans. Obtainable through local VA offices by submitting form DD-214 (Separation Paper) and VA form 1880 (request for Certificate of Eligibility).

Closing Instructions:

This document contains instructions from the lender specifying certain loan requirements and conditions. This rarely needs signature or initials, but let the borrowers review it anyway.

Compliance Agreement:

This document signed by the borrowers stating that they will help the lender after closing to correct any errors in the documents at the lenders request. This is meant to only apply to clerical errors so that the loan will meet requirements from Fannie Mae or FHA, etc.

Consumer Choice Disclosure:

This disclosure is provided to the borrower because they may have inquired about a lender-affiliated mortgage or escrow company. The lender is stating that any referrals were only suggestions and that the borrower is free to choose any company that he or she desires.

Correction Agreement:


If any document is lost, misplaced, misstated, inaccurately reflects the true and correct terms and conditions of the loan, the borrower will comply to execute, acknowledge, initial and deliver corrected documents to lender within the necessary time frame.


Deed of Trust / Mortgage (Fannie Mae/Freddie Mac Uniform Instrument Form 1030):

This document secures the subject property as collateral in consideration for the loan, and is recorded with the county court clerk of the county and state the property is located in. Have the borrower check that the loan amount is correct and that the length of the loan is accurate. Since this document is recorded, as long as there are no specific restrictions in your state and/or county, have the borrowers initial the bottom of every page, (unless the Title Company or Signing Agency’s instructions instruct you otherwise.)  The document is a standard form; therefore the terms and paragraphs in the body of the document may, or may not apply to the loan. Have the borrower(s) sign their name in blue ink (unless another color is specified) exactly as it is printed. This document will require notarization.

Deed of Trust / Mortgage Riders:

At the end of the Deed of Trust/Mortgage there may be a list of Riders (additions or amendments) to the document. If one or more of the boxes are checked, then the appropriate Rider will be attached. Examples include the Condominium Rider, 1-4 Family Rider, Planned Unit Development (PUD) Rider, VA Loan Rider, and Balloon Rider. These will need signatures, but not notarization since the Riders are part of the Deed/Mortgage.

Direct Endorsement HUD/FHA Insured Mortgage:

This is a mortgage program developed by the federal government. It allows purchasers to obtain a mortgage with a minimal down payment. FHA mortgage insurance is required because of the low down payment to the risk. When the mortgage is paid off, funds must be received by the lender by the first of the month or another month's interest is added to the payoff.

Equal Credit Opportunity Act (ECOA) Disclosure:

Federal law requires creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.

Escrow Account Disclosure:

Account held by lender containing funds collected in conjunction with monthly mortgage payments. Also known as impounds, the funds in this account are held in trust by the lender on behalf of the borrower, and are used to pay expenses such as property taxes and homeowner's insurance.

Escrow Transfer Request (Irrevocable Assignment of Escrow):

This form must be signed by the borrower if the borrower's lender has an escrow account. Since the new lender gives credit to the borrower for the amount of money in this account, this document instructs the previous lender to send any funds remaining in the escrow account to the new lender when the mortgage is paid off.

Escrow Waiver Agreement:

This document allows the lender to waive its right to require the borrower to establish an escrow impound account to pay for such things as real estate taxes or hazard insurance premiums.

First Payment Letter:

This document states when the borrowers first payment is due and what it has been estimated to be.

Flood Certification:

Federal law requires that you obtain flood insurance, if you obtain a mortgage, and your property is in a designated flood zone. This fee is paid to a third party to determine the flood zone status of your property, and to notify the lender of changes to the flood zone map that effect your property during the life of your loan.

(Buyers) Gap Affidavit:


This document is for assuring the Title Company that there is no agreement, contract, commitment or option for the sale, lease or mortgage of the property nor any such agreement, contract or option which could affect the title to said property; that there are no matters pending against Affiants that could give rise to a lien that would attach to the property between the Title Insurance Company, Title Insurance Commitment and the date of the recording of the Deed, and that the Affiants have not and will not execute any instrument that would adversely affect the title to the property prior to the recording of the Deed.


Good Faith Estimate:

This document discloses the estimated loan closing costs. RESPA requires that when a borrower applies for a loan, the lender or mortgage broker give the borrower an estimate of settlement service charges he/she will likely have to pay. If the borrower does not receive this estimate when applying for the loan, the lender or mortgage broker must mail or deliver it to the borrower within three (3) business days. Ideally, the borrower would have the Good Faith Estimate in advance of the closing to compare to the HUD-1 Settlement Statement at closing. Typically this form requires the signature of the borrower(s) prior to proceeding with the drawing of loan documents. Since loans turn around quicker than in the days before RESPA was enacted, the Good Faith Estimate often will be signed at the signing appointment.

Hazard Insurance Authorization and Requirements:


This outlines the lender's policies and minimum requirements for hazard insurance that is required to cover the subject property. After the Authorization is signed and returned, the document will be sent to the borrower's insurance agent who will provide the necessary coverage.


HUD-1 Statement / Settlement Statement:

This document is generated at the close of escrow and details all costs and expenses that are associated with the transaction. Included in the HUD are: the settlement charges to borrower, the amount of the loan to be paid off, the gross amount due from the borrower, the principle amount of the new loan, and any other deposits or fees. If there is an amount or an “x” on line 303 or 1601, that will let the notary know that there are additional funds to be collected from or provided to the borrower. A notary can explain what the charges are for, but cannot explain the reason for the amount of each charge. Generally, if there is no addendum to the HUD, there will be a place on each page of the HUD for the borrower's signature.

HUD-1 Addendum/Acknowledgement:

This is an additional page that may be attached, and verifies that the borrowers have read and understand the HUD. This document will require borrower's signatures.

Itemization of Amount Financed:

This form accompanies the Truth in Lending Disclosure, showing how they come to the Amount Financed figure. This figure differs from the actual principal borrowed amount. The Amount Financed figure excludes prepaid finance charges. Prepaid Finance charges are itemized on this page. The fees listed on this form have corresponding HUD-1 reference numbers.

Initial Escrow Account Disclosure Statement:

This form discloses the full payment and the breakdown of the amount paid to principal and interest; and the amount paid to an escrow account each month. It shows the inflow and outflow of escrow items from the escrow account such as insurance and taxes paid out. It also keeps a running balance figure in the escrow account and shows the lender’s designated minimum cushion.

Loan Servicing Disclosure:

This form explains whether or not the lender will be the one actually servicing (the  collection of mortgage payments from borrowers and related responsibilities, such as handling escrows for and payment of property taxes and insurance, foreclosing on defaulted loans and remitting payments to investors,) the loan. This will disclose whether the borrower's loan will be sold to a third party.

(Rate) Lock Confirmation Worksheet:

This document is the lender's guarantee of a specific interest rate and any related points for a set period of time, usually between the time of the loan application and the loan closing. This protects the borrower against rate increases during that time.



            See Deed of Trust (above)


Mortgagor’s (Occupancy) Affidavit:

This document is used by the Federal Housing Administration to insure the loan, or by the Veteran's Administration to guarantee the loan, or by a Private Mortgage Insurance Company to insure the loan. This document also states whether or not the borrower intends to occupy the property as their primary residence. It also determines if a property is located in a special flood hazard area. This document will need to be signed and notarized.

Note (Fannie Mae/Freddie Mac Uniform Instrument Form 3210):

The note is the actual loan agreement and it outlines the specific terms of the loan. The note includes: the address of the property, the loan amount (principle), the name of the lender, the interest rate (and whether it is a fixed rate or an adjustable rate; and if adjustable, the date(s) the interest rate will change, the amount it may change each time, and the maximum amount it may adjust to,) the date on which the first payment of the new loan is due, where the payments are to be mailed, the monthly payment (only the principle and interest amount; taxes and insurance, if escrowed, are NOT included on the Note,) the percentage charged by the lender if the payment is more than 15 days late (grace period), and whether or not there is a prepayment penalty (for paying the loan off early.) Make sure that the borrower(s) understand these terms and agree with them before they sign this document.

Notice of Right to Copy of Appraisal (ECOA):

This document informs the Borrowers that the Lender may require an appraisal to determine the value of their property and charge them for this appraisal. If performed, the Borrowers have a right to obtain a copy of this appraisal prior to closing the loan.

Notice of Right to Cancel:

If the loan allows for the borrower to cancel the loan that is being signed within three business days (including Saturday) this notice will be included. Sundays and National Holidays are excluded from the calculation of three business days. Be careful to monitor where the borrower signs this document. The borrower should usually sign on the line that says they have received the document (not the line that states they wish to cancel). There will usually be multiple originals of this document. Have the borrowers sign all originals. Return one original (for each borrower) with the loan package, and leave the rest with the borrower(s). This document typically only applies to a loan on the borrower’s primary (homesteaded) property, when refinancing. The initial loan (at time of purchase), and any loan for a second home, vacation home, or investment property will not have a 3-day right to cancel.

Notice of Special Flood Hazard:


Informs borrower whether their area is deemed a flood zone and if they will be required to have flood insurance.


Occupancy Affidavit and Financial Condition:


Borrower declares that they now presently or intend to occupy the property as their primary residence. The affidavit also declares that the borrower's financial condition has not materially changed since submitting the loan application. This document is used as a condition to obtain the loan. The Affidavit is usually notarized, but depending upon the lender, the form may be notarized with an acknowledgment or a jurat. Some variations of the Occupancy Affidavit are not notarized.


Overnight Fee Statement:

This allows the lender to use an overnight express mail service to pay the previous mortgage off. Let the borrower know that this fee is already reflected in their HUD-1 statement. This is merely a disclosure statement.

Patriot Act Disclosure:

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. The Closing agent must confirm each Borrower's identity with an acceptable form (or forms) of a valid, current government-issued ID. The Closing agent must sign and date this form. Some forms require the borrowers to also sign and the closing agent must complete and sign the bottom section of the “Important Applicant Information” sheet that follows. Acceptable forms of ID are listed on the form itself. The ID cannot be expired.

Payoff Letter:

This document authorizes the lender to pay off the old loan with the funds from the new (refinance) loan.

Payoff Statement:

This form itemizes the old loan with other fees that may include: prepayment interest, optional insurance, fees required for payoff, funds to be credited, and funds to be retained. This tells the borrower(s) how the amount of payoff of the old loan was reached. There is usually a faxed copy of the pay-off amount from their current lender. Generally, the total payoff amount on this statement will match the payoff amount listed on the HUD-1 statement.

Privacy Disclosure:

This document states that the lender (and title company) does not disclose any nonpublic information about the borrower to anyone, except as permitted by law.

Request for Copy or Transcript of Tax Form (Form 4506-T):


Loans are periodically and randomly chosen for audit to ensure a borrower did not commit fraud by falsifying tax information in obtaining the loan. This form allows a lender to get a tax return transcript, or verification that you did not file a federal tax return, form W-2 information, or a copy of a tax form. This document is for each individual borrower, so there should be one for each borrower.


Request for Taxpayer Identification Number and Certification (Form W-9):

Each year the mortgage company will report to the IRS the interest the borrower paid on the mortgage during the previous tax year. This form allows a lender to request verification of the borrower(s) Social Security or Taxpayer Identification number. This document is for each individual borrower, so there should be one for each borrower.

Servicing Disclosure Statement:

This document informs the Borrowers that the Lender will service (accept payments) their loan at their institution, or they intend to assign, sell or transfer the servicing of their loan to another entity.

Signature/Name Affidavit:

This document is the borrower’s affirmation that the name used on the loan documents is in fact their legal name and signature, along with any other variations of their legal name. This document is for each individual borrower, so there should be one for each borrower.

Subordination Agreement:

This document alters the priority of existing liens against the property, such as an existing HELOC or second mortgage, ensuring that the new Deed of Trust/Mortgage will be placed in the first lien position on the title of the property. There may be multiple subordination agreements. This document requires notarization. This document will usually have notarized signatures from the entity that is agreeing to the terms of the subordination agreement. Notarization of the borrower(s) signatures must also be completed on the agreement.

Survey Affidavit:

This document is signed by the borrower(s) to warrant that they are not aware of any easements, encroachments, liens or any other right-of-interest by anyone else in regard to the subject property. An easement is a formal right to travel through someone else’s property. An encroachment is a formal right of someone other than the primary property owner, this is usually established if someone’s garage, fence, or driveway was built or installed across a property line. If a property owner does not have a formal survey when they build but rather thinks they know where the property line is, this sometimes occurs. This type of mistake is not found until an up to date survey is done. This use of the word ‘survey’ does not refer to a survey as in a questionnaire; it refers to the surveying of property by a professional land surveyor. This is done by hiring a professional surveyor to come in and locate property lines through very detailed measurements off of known established benchmarks. This may or may not have been a requirement of the loan conditions.


Tax Authorization Form:

This form authorizes the lender to obtain a copy of the property’s tax bill from the County taxing authority and use the withheld escrow monies from the borrower's monthly payment to pay the taxes on the property.

Truth-In-Lending Disclosure:

This form is required by the Federal Truth in Lending Act (TILA). TILA requires sellers and lenders to disclose credit terms and interest rates in an identical manner so borrowers can shop around to compare loans. There are different disclosures required by the TILA. For example, the TILA requires the RTC (Right-to-Cancel) form and the Itemization of Amount Financed/Prepaid Finance Charges form. TILA requires lenders to make certain disclosures on loans subject to the Real Estate Settlement Procedures Act (RESPA) within three (3) business days after receipt of a written application. This early disclosure statement is partially based on the initial information provided by the borrower. A final disclosure statement is provided at the time of loan closing. The disclosure is required to be in a specific format and include the following: a) the Annual Percentage Rate (APR) is the cost of the loan in percentage terms and includes private mortgage insurance and prepaid finance charges (loan discount, origination fees, prepaid interest and other credit costs). The APR is calculated by spreading these charges over the life of the loan, resulting in a higher rate than the interest rate shown on the note. Some TIL's come with a page of Terms. b) Finance Charges, c) The amount financed, d) Total Payments and payment schedule, e) Prepayment penalties, if any and f) Assumption option, if allowed. It discloses the following to the borrower: the annual percentage rate (APR), total amount of finance charges, the amount financed, total number of payments, and the amount of each payment associated with the loan. The Annual Percentage Rate (APR) is usually slightly different than the Note interest rate due to the amount of prepaid finance charges paid up front on the loan. See the Itemization of Amount Financed for the amount of prepaid finance charges on the loan.

Uniform Residential Loan Application / (Fannie Mae Form 1003, Freddie Mac Form 65):

An initial statement of personal and financial information required to approve a loan provided by the borrower and necessary to initiate the approval process for a loan. This document is required by lenders prior to loan approval; borrowers must sign an original copy at time of closing.



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