Mortgage Disclosures FAQ
Learn how to read your mortgage disclosures, check important loan fees, and understand key definitions with our interactive sample documents.
Need a quick answer?
Clear answers about rates, closing costs, discount points, disclosures, and what happens during the loan process.
Loan Estimate Explained
Review each page of your Loan Estimate and learn what the main fields mean before you move forward.
General Questions
Clear answers about rates, closing costs, discount points, disclosures, and what happens during the loan process.
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If you can't find the answers you're looking for, or if you need personalized assistance, Nhan Cao is here to help you navigate your unique mortgage journey.
What is a mortgage rate?
A mortgage rate is the interest charged on your home loan. It affects your monthly principal and interest payment and the total interest paid over the life of the loan.
How do I compare mortgage rates?
Compare loans with the same term, loan type, lock period, and point structure. Review both the interest rate and APR, along with lender fees and estimated cash to close.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR is a broader annualized cost that also includes certain lender fees, points, and other finance charges.
What is a mortgage point?
One mortgage point equals 1% of the loan amount. Points may be charged as origination fees or paid as discount points to reduce the interest rate.
What are origination fees?
Origination fees cover the lender's work to process, underwrite, and prepare the mortgage. They may appear as a flat fee or as a percentage of the loan amount.
What is a discount point?
A discount point is an optional upfront payment used to obtain a lower interest rate. Whether it is worthwhile depends on the cost and how long you expect to keep the loan.
How much does a mortgage point cost?
One point costs 1% of the loan amount. For example, one point on a $400,000 mortgage costs $4,000.
How much will one point lower my rate?
There is no fixed reduction. The rate improvement varies by lender, loan program, market conditions, credit profile, and lock period. Your Loan Estimate shows the actual pricing.
What is a lender credit?
A lender credit helps cover some closing costs in exchange for accepting a higher interest rate. It can reduce upfront cash but may increase the loan's long-term interest cost.
What is a mortgage rate lock?
A rate lock reserves an interest rate and specified pricing for a limited period while the loan is processed, provided the loan details do not materially change.
When should I lock my mortgage rate?
The timing depends on your closing schedule, risk tolerance, and current market. Confirm that the lock period is long enough to cover underwriting and the expected closing date.
How does the Federal Reserve affect mortgage rates?
The Federal Reserve does not directly set mortgage rates. Its policies influence inflation expectations and bond markets, which can cause mortgage rates to rise or fall.