From Loan Estimate to Closing Day (and Keeping Your Home)

1. Ask at least three lenders for a Loan Estimate, for example a bank, a credit union, and a mortgage company. A lender must send it within three business days after you apply.
2. Apply within a short time, such as two weeks. Credit scores count several credit checks from mortgage lenders made close together as a single inquiry. Depending on the score, that window is 14 to 45 days.
3. Make sure each estimate is for the same loan type, loan amount, and down payment, so you can compare fairly.
4. Compare the interest rate, points, APR, monthly payment, closing costs, and cash to close.
5. Ask each lender to explain any fee you do not understand. You can ask, "Can you lower this fee or match this other offer?"
6. On page 1, check for a prepayment penalty (a fee for paying off the loan early) or a balloon payment (a very large payment due at the end). Most buyers should avoid both.

Mortgage rates change every day. A rate lock holds your rate for a set time, often 30, 45, or 60 days, as long as you close in time and nothing in your application changes. Ask for the lock in writing.

Even with a lock, your rate or costs can change if:

• you change the loan type or the size of your down payment,
• the appraisal (a professional estimate of the home's value) comes in higher or lower than expected,
• your credit score changes, or
• the lender cannot document some of your income, such as overtime or bonuses.

Ask your lender: "How long is my lock? What will it cost to extend it if closing is delayed?" Extensions can be expensive.

The lender must give you the Closing Disclosure at least three business days before closing. (In the DC area, closing is often called settlement.) Use those days to compare it with your latest Loan Estimate, line by line.

Which costs can change

• Cannot go up (unless something in your application or loan changed, or your rate was not locked yet): fees paid to the lender or mortgage broker, such as points and origination fees, fees for required services you were not allowed to shop for, and transfer taxes.
• Can go up, but by no more than 10% in total: recording fees, and fees for required services when you chose a provider from the lender's list.
• Can change by any amount: prepaid interest, homeowners insurance, escrow deposits, and services the lender does not require.

If a fee went up more than the rules allow and nothing changed, you are entitled to a refund of the extra amount. Some changes also give you a new three-day waiting period: the APR on a fixed-rate loan goes up by more than 1/8 of a percentage point, a prepayment penalty is added, or the loan type changes, for example from fixed to adjustable.

Closing-week checklist

• Compare the Closing Disclosure with your Loan Estimate: loan amount, rate, monthly payment, points, fees, and cash to close.
• Ask the lender about every difference before closing day.
• Set up homeowners insurance. Lenders require it.
• Confirm how to pay your cash to close by calling a phone number you already trust.
• Do a final walk-through: visit the home to check that it is in the condition you agreed to.
• Bring a photo ID. If you need an interpreter, arrange one ahead of time, or bring someone you trust.
• Do not sign anything you do not understand, and never sign blank pages. Keep copies of everything.

Fewer work hours, a layoff, or a medical bill can make it hard to pay. The most important step is to act early. Generally, the foreclosure process cannot start until you are more than 120 days behind. Use that time.

1. Call your servicer as soon as you know you might miss a payment. The phone number is on your monthly statement.
2. Ask about loss mitigation options, such as a repayment plan, a forbearance (a short pause or lower payments), or a loan modification (a lasting change to your loan terms).
3. Send a complete application quickly. If your servicer gets it before the foreclosure starts, the servicer generally must review it before it can start the foreclosure.
4. Call a HUD-approved housing counselor at 800-569-4287. They can help you with the application, often for free.
5. Open every letter from your servicer and from the court. If you miss a deadline, you can lose some options.

Hello, my name is [your name]. My loan number is [loan number]. My income dropped on [date] because [reason]. I want to keep my home, but I may not be able to make my payment due on [due date]. What loss mitigation options do I have? Please send me an application and tell me every document you need and the deadline. May I have your name and a reference number for this call?

Local help

• DC: call the Foreclosure Prevention Hotline at (202) 265-2255. After you get a notice of default, you can use the DC Foreclosure Mediation Program, where you and your lender meet with a neutral mediator. Legal Aid DC and the DC Bar Pro Bono Center offer free legal help to people who qualify.
• Maryland: call the homeowner assistance hotline at 1-877-462-7555. Maryland also has foreclosure mediation for people who live in the home. You must ask the court for it within 25 days after you receive the court papers that start the foreclosure, and there is a fee. Maryland Legal Aid helps people who qualify.
• Virginia: call a HUD-approved counselor early. Legal Services of Northern Virginia helps people who qualify.

For more steps when income drops, see When Income Stops: Your First 30 Days.