Below are questions from the MyLoanDetail application that your borrowers will review. Please review and if you have questions please contact your Account Executive for more information.
1. Welcome to MyLoan Detail
Your Mortgage Broker has placed your loan with Carrington Mortgage Services, LLC (“Carrington”). “My Loan Detail” is a short program that explains the mortgage process, and confirms your understanding of your mortgage loan. The program takes just a few minutes to complete. This program is the final, required step in the loan application and approval process. Please click on the button below to begin.
2. What is a Mortgage Loan?
A “mortgage loan” is a loan secured by real estate, in this case, your home. A lender provides the financing necessary for you to acquire your home or refinance an existing loan.
A mortgage loan is a contract between a borrower and a lender. The lender’s part of the bargain is to provide financing to a qualified borrower. Your responsibility as a borrower under the mortgage loan is to repay the debt with full and timely payments.
3. Key Parties to your Mortgage Loan
There are a number of different people involved in your loan application and closing process. You may be contacted by some or all of the following people during the application process:
Loan Officer: A representative of your mortgage broker who assists in the application process. Your loan officer, Test Broker, can be reached at 949-555-1212 or by email.
Appraiser: A professional that is not an employee of the mortgage company who evaluates the home’s current market value. In some cases two appraisals may be required for certain loans. The appraiser for this transaction is To be determined, and the appraised value of your home is $ [Appraisal Amount]. Carrington will promptly provide you with a free copy of your appraisal.
Underwriter: An employee of the mortgage company who checks the loan application file to ensure that all required paperwork and standards have been met. The underwriter may require more information from your loan officer. Mortgage insurance providers and other parties, such as investors, can also impact loan approvals.
Loan Processor: Is also an employee of the mortgage broker. After completion of your application, it is the primary responsibility of the processor to work together with both the underwriter and the loan officer to ensure all conditions are met for loan approval. The processor often functions as a “coordinator” between parties.
Closing Agent: The individual who organizes and conducts settlement. Your closing agent is To be determined. In different areas of the country
“settlement” and “closing” may also be called “escrow”.
Do you understand that there will be a number of people involved in the loan application and closing process?
4. Loan Underwriting and Approval
Federal and state rules, as well as Carrington’s duties and responsibilities to insurers, investors and Carrington’s shareholders, require that every mortgage loan must be carefully underwritten and borrower information verified. To originate a mortgage loan we must confirm that every borrower, based on the financial and other information the borrower has provided to us, has the intent and the ability-to-repay their mortgage loan at the time the loan is made. When considering a mortgage loan application, Carrington looks at such factors as employment and income, credit history, assets, down payment, loan size, home value and other factors to determine mortgage loan eligibility.
Do you understand there are a number of important factors we must consider when underwriting your loan?
5. What’s the Role of the Investor?
Mortgage loan lenders such as Carrington generally sell the mortgage loans they originate into the “secondary market” to an investor such as a government-sponsored entity, financial institution, pension fund, insurance company, or other buyer. Therefore, the “secondary market” is where mortgage loans are packaged together, and bought and sold by investors. By selling mortgage loans, lenders are able to bring new Cash into the marketplace thus ensuring capital is continuously available for future loans. Your mortgage loan may or may not be sold at our discretion. The sale of your mortgage loan has no bearing on the terms agreed upon between you and the lender, or your responsibility to make timely payments each month as required by your mortgage loan.
Do you understand that your loan may be sold to an investor but that does not change in any way your
obligation to make timely payments each month?
6. What is Mortgage Insurance?
Lenders typically require borrowers to have a stake (equity) in the home they finance, usually 20 percent of home value. However, not everyone has 20 percent of the value in cash or equity. To buy with less cash or to refinance with less equity, borrowers may purchase mortgage insurance through such government programs as the FHA, VA
or a private insurance company. As with any form of insurance, there is a premium charged for coverage that is paid with your monthly mortgage loan payment.
Do you understand that by purchasing mortgage insurance you can sometimes finance real estate with less
money down or less equity than otherwise possible?
Do you understand that your mortgage loan includes mortgage insurance and that your monthly mortgage
loan payment includes an insurance premium?
7. Why is so Much Information Needed to Qualify for a Loan?
Before a mortgage loan can be originated, a series of requirements and standards must be met. Carrington has requirements, mortgage insurance companies have standards and investors have standards. These standards must all comply with Federal, State and local laws. To ensure that all requirements are met, each mortgage loan application must be carefully documented and verified. Loan officers help gather information. Underwriters then review each application, the supporting documentation, and any related information to ensure that all necessary documentation has been obtained and to ensure all requirements for an individual mortgage loan program have been met.
8. What Happens if Things Go Wrong?
Just like missed rent or unpaid auto loan payments, missing mortgage loan payments is a big problem. Borrowers who do not make payments required under the mortgage loan contract can lose their property to foreclosure, ruin their credit standing and may also face “deficiency” judgments. A deficiency judgment is a claim by a lender who brings a legal action to recover unpaid mortgage debt and foreclosure costs if you default on your mortgage loan (may not be applicable in all jurisdictions).
Do you understand that if you do not pay your mortgage loan you can face foreclosure, lose your home and
possibly face deficiency judgments?
9. Basic Mortgage Loan Information
Now let’s review some of the terms and conditions of your mortgage loan:
Your mortgage loan is a form of debt used to buy or refinance a loan secured by a piece of real property such as a single-family home, condo, townhouse or duplex.
You promise to repay the full amount of the mortgage loan. The mortgage loan is a contract between you and the lender. The mortgage loan is secured by the property being financed.
If you cannot or will not repay the money borrowed to buy your home or refinance an existing mortgage loan, then the lender has the right to repossess the home through foreclosure. The lender may also have the right to collect from you any unpaid mortgage loan amount not covered by the repossession of the property.
10. Your Home
When reviewing a mortgage loan application, we look at the value of your home, which will serve as security for your mortgage loan. The value of the home is determined by the purchase price (estimated price if you are refinancing your home) or the appraised value, whichever is lower. If the purchase price (or estimated price if you are refinancing) is anticipated to be $250,000.00 and the appraised value is $0.00, then the value of the home is To be determined. The value of your home may fluctuate over time, but this does not affect your obligation to pay back the mortgage loan in full. If the home value increases, you do not owe the lender more money than was originally loaned. Similarly, if the home decreases in value, the amount of money owed to the lender is not reduced.
Do you understand that the value of your home may go up or down, but that fluctuations in the value of the
property does not change the terms of the mortgage loan, or your obligations to make timely mortgage loan
11. Okay, Let’s Review Your Application
We’ll begin by reviewing the personal information you provided.
1. Your Name: [name]
2. Your date of birth: [date]
3. The phone number where you can best be reached: [phone]
4. Your email address: [email]
5. Your current address: [address]
6. The address of the property being purchased (if you are not refinancing): [property address]
7. The last 4 digits of your Social Security number: [SSN last 4 Digits]
Is the information listed in the seven items above correct?
Will the home being purchased be your primary residence?
Have you told your lender about all other properties (such as a vacation home or investment property) you
own on your mortgage application?
Have you accurately disclosed all your debts in your mortgage application? Including any other loans in the
12. Basic Terms of Your Mortgage Loan
Listed below are some basic terms of your mortgage loan:
1. The value of the home you are purchasing or refinancing is: [home value]
2. Your down payment is: [Down Payment]
3. Your mortgage loan principal amount is: [Principal Balance]
4. The term of your mortgage loan is: [Loan Term]
5. Your interest rate is: [Interest Rate] per annum
Your monthly mortgage loan payment may include some or all of the following: principal, interest, real estate taxes, homeowner’s insurance and mortgage insurance. Your first monthly mortgage loan payment is: [$ first months payment] and is due on [date] and all subsequent monthly mortgage loan payments are on the first of every month after that.
6. Principal and Interest: A portion of the monthly mortgage loan payment is used to reduce the mortgage loan principal amount. In addition, a portion of the monthly mortgage loan payment is used to pay interest on the outstanding loan balance owed on the mortgage loan.Interest can be thought of as the “cost” paid for the use of borrowed money. Your first monthly principal and interest payment will be [$Amount]
Real Estate Taxes: A portion of the monthly mortgage loan payment is used to cover the cost of property taxes, the
servicer pays on your behalf. Your first monthly payment for taxes will be [$Amount].
Homeowner’s Insurance: A portion of the monthly mortgage loan payment is used to pay homeowner’s insurance.
Your first monthly homeowner’s insurance payment will be [$Amount].
Mortgage Insurance A portion of the monthly mortgage loan payment is used to pay mortgage insurance premium.
Your first monthly mortgage insurance payment will be [$Amount].
Do you understand each of the components of your monthly mortgage loan payment?
Do you agree that you have been given clear and understandable monthly mortgage loan payment
information about your mortgage loan?
Do you understand that your monthly mortgage loan payment may include expenses for other costs in
addition to principal and interest?
13. Fixed-Rate Amortization
Your loan is a “fixed-rate” mortgage loan. With a fixed-rate mortgage loan, the TOTAL cost of mortgage principal and mortgage interest remains the same each month. However, because the mortgage loan balance declines and the total payment remains the same each month, the proportion of principal to interest changes each month.
The process by which your mortgage loan balance decreases over time is known as “amortization”. With a fixed-rate mortgage loan, more of your payment goes towards paying interest in the early years of your mortgage loan. In later years, more of your payment goes towards paying the principal balance.
Press HERE to see an amortization chart showing how the composition of your monthly mortgage loan payment is expected to change over time.
You should expect that, over time, your monthly mortgage loan payment will change because expenses for homeowner’s insurance, real estate taxes and fees are likely to change.
Do you understand the projected amortization statement?
Do you understand that costs for “fixed-rate” financing may rise over time because of rising tax and
insurance premiums and as a result your total monthly payment mortgage loan payment may go up?
14. Escrow Accounts
At closing, money will be set aside in an “escrow” account. The escrow account is held by the servicer to ensure that your real estate taxes, homeowner’s insurance and mortgage insurance are paid on time.
If your local real estate taxes increase, additional money will be needed to keep the escrow account at the required level. If there is a shortage in the escrow account, your monthly mortgage loan payment will be adjusted, so the amount of money you set aside each month may change.
Do you understand that the servicer has established an escrow account with your mortgage?
15. Ability to Repay Your Mortgage Loan
You have provided Carrington information about your income, assets, other debt payments and total amount of other debt. This information allows us to determine your ability-to-repay your mortgage loan:
1. The current annual income associated with this loan application 1. is: [$Amount]
2. The current monthly income associated with this loan application is: [$Amount]
Your monthly mortgage loan payment, which may include some or all of the following: principal, interest, taxes, fees, homeowner’s insurance and mortgage insurance, is expected to be: [$Amount]
The figures above contribute to the lender’s determination of your ability-to-repay your loan. Are the figures
shown in items one, and two above correct?
Do you believe you are able to make timely monthly mortgage loan payments on your mortgage loan?
16. Budgeting and Residual Income
In addition to the cost of housing, you also have expenses for such things as food, clothing, transportation, credit, alimony, child support, healthcare and other various debt and expenses. To maintain good credit standing, all bills must be paid on time.
1.The monthly income associated with this loan application is: [$Amount]
2. Monthly mortgage loan payment will be: [$Amount]
3.There will be [$Amount] remaining after your monthly mortgage loan payments to cover all other non-housing related living expenses and federal/state income taxes.
4. Other monthly debt payments (auto, credit cards, etc.) associated with this loan application is: $0.00
Also, with homeowner associations and similar organizations there can be “special” assessments from time to time, which can require additional payments. Homeowners association fees are not part of the escrow account, and you are responsible for making those payments directly.
The figures above contribute to the lender’s determination of your ability to repay your loan.
Are the figures shown in items one through three above correct, and is this an accurate accounting of your
income and expenses?
Do you understand that monthly mortgage loan payments, including principal, interest, taxes and fees, and
homeowner’s insurance and mortgage insurance will represent a large part of your monthly income?
Do you believe that after making your monthly mortgage payment, other debt payments, alimony and child
support (if applicable) you have sufficient residual income to cover your non-housing related living
Do you understand that unexpected events such as (i) changes to your jobs (e.g., loss of job, loss of
overtime, loss of bonus), (ii) medical bills, (iii) automobile repair bills or (iv) home repair bills do not change
the terms of the mortgage loan, or your obligation to make timely monthly mortgage loan payments?
The closing is also known as settlement or escrow. It is a meeting where all mortgage loan details and paperwork are finalized. At closing, the property and funds change hands. A closing agent will be present to ensure that the funds and title to the property are transferred to the correct parties. The duties and responsibilities of various parties to the transaction will be confirmed and finalized. The parties to your mortgage loan include:
1. Carrington — the lender.
2. The previous lender — to pay off existing debt on the property.
3. The mortgage insurance company or program that is insuring the loan.
4. The government — to collect taxes.
5. The property insurance company — because a mortgage loan requires that property insurance must be in place during the entire mortgage loan term.
18. Closing Expenses
In addition to the down payment or equity required to complete your mortgage loan, several additional considerations are necessary: First, closing costs such as transfer fees and settlement expenses are in ADDITION to the down payment. You will receive a “Good Faith Estimate” itemizing these expenses prior to closing.
Second, in some cases, the seller may be willing to pay some or all of the buyer’s closing costs with a “seller’s contribution”. The size of a seller’s contribution is limited by underwriting rules. Certain mortgage loan programs may allow you to include some or all closing costs into the mortgage loan amount, thus creating a larger mortgage loan. Caution: Such arrangements are sometimes described as “no cash” closings. However, with such programs, closing expenses are paid over extended time periods in the form of a larger mortgage loan amount on which you’ll pay interest.
Click here to review a summary of your estimated closing costs
Did you receive your Good Faith Estimate?
Do you understand all of the costs included at closing?
Do you understand that by including closing costs in your mortgage loan, you will be paying interest on
these costs over time?
19. The Role of the Servicer
Once your loan is funded, you will be contacted by your loan servicer, (for loans originated by Carrington, this is Carrington Mortgage Services). A loan servicer is responsible for collecting monthly mortgage loan payments and paying real estate taxes, homeowner’s insurance and mortgage insurance costs from your escrow account.
1. Your first mortgage loan payment of [$Amount] will be due: [Date]
2. Your monthly mortgage loan payment will be due in full on the FIRST of the month thereafter. Mortgage loan payments will be considered late if they are not received in full by the 15th of the month.
Do you understand that your monthly mortgage loan payments will be due on the first of the month?
20. Your Mortgage Payment Options
Some of the payment options may have associated Service Fees (e.g., Carrington Service Fees and/or third-party bank fees). If a Service Fee is charged by Carrington, it will be disclosed to you prior to making a payment and you will be given the option of not proceeding with the payment transaction if you do not wish to pay the Service Fee.
We offer you a number of payment options, including:
1. Direct payment from a bank or other account.
2. Check by mail.
3. Auto debit.
4. Pay by phone.
5. Wire transfer.
6. Online payments.
Do you understand that there are multiple options for you to make your monthly mortgage loan payment?
21. What Happens if Your Payment is Late?
Your mortgage loan has a date on which the monthly mortgage loan payment is due and payable, as well as a “grace” period. The purpose of the grace period is to ensure that your monthly mortgage loan payment will be recognized as having been made on time even if there are slight delays in the mail or the monthly mortgage loan payment is due on a holiday.
Your mortgage loan contract will state that in the event of a late payment (a payment not received by the due date and within the grace period) you will be assessed a penalty. You MUST pay the penalty and the late payment in order to bring the loan current.
Do you understand that you may face a significant penalty if your payment is late?
Do you understand that your monthly mortgage loan payment must be paid on time and in full?
22. What if You Are Late or Miss a Payment?
You should immediately contact your loan servicer to explain when the monthly mortgage loan payment will be made and why the payment was not made. You can find your loan servicer’s contact information on your monthly mortgage statement.
If possible, contact the servicer BEFORE the payment is due if you foresee a problem. Note: There may be cases where late fees can be waived and other forms of servicer assistance can be provided.
Do you understand you should immediately contact your loan servicer to explain when the monthly
mortgage loan payment will be made and why the payment was not made?
23. Final Confirmation
The material presented in this program is for
1. General educational purposes
2. You to understand the terms of your mortgage loan
3. You to understand your monthly mortgage loan payment
4. Us to confirm the accuracy of the information you have provided to Carrington
5. You to have an opportunity to provide Carrington with any additional information that we may have missed or was not asked of you that may be important to us processing your loan application and determining your ability to repay your mortgage loan
You are welcome to contact your Carrington representative by phone or email with any questions or concerns regarding the “My Loan Detail” process.
If you have any questions regarding your loan terms, please contact your loan officer.
Have you read, understood and agree to this program as presented in My Loan Detail?
24. Thank You
Thank you for completing the My Loan Detail program. We look forward to our relationship together. If you have further questions please contact your loan officer, [Name], at [Phone #] or by email at [email].
1. I have read and understood the My Loan Detail program.
2. I have completed this program on my own, without coaching from anyone affiliated with Carrington
3. I know that I can contact my Carrington Loan Officer anytime by phone or email with any questions I may