Example of a guaranteed mortgage package agreement
Here's a look at a guaranteed mortgage package agreement
that may be offered to you when arranging for a new mortgage.
Guaranteed Mortgage Package Agreement
This GUARANTEED MORTGAGE PACKAGE AGREEMENT
commits us, ____________________, the PACKAGER, to provide you,
________________, the BORROWER(S) upon your acceptance and payment
of a $ _______ fee within _______ days (30 days or greater) of the
date this form is delivered or mailed to you: (1) a mortgage loan
on the property described below at a GUARANTEED INTEREST RATE; (2)
a GUARANTEED MORTGAGE PACKAGE PRICE for settlement services required
by the lender; (3) a firm estimate (within 10%) of the amount of
OTHER REQUIRED SETTLEMENT COSTS you will pay at or before settlement;
and (4) a sum of the TOTAL ESTIMATED SETTLEMENT COSTS that you will
be required to pay at or before settlement to obtain your mortgage.
This Agreement is subject to verification
of your credit rating, final property appraisal, and other appropriate
underwriting criteria. Other providers offer similar packages, or
alternative approaches to mortgage origination. You should shop
to find the best packager or originator and mortgage product to
meet your needs.
THE PROPERTY: You seek to [purchase]
[refinance] a residential property at
1. INTEREST RATE GUARANTEE
We guarantee to provide you an [initial]
interest rate of ______ on a [fixed rate] [adjustable] mortgage
of $ _______ for [ ] years with [ ] monthly payments. Your [initial]
monthly payments for principal and interest and monthly mortgage
insurance on this loan will be $ _______. Your APR will be _____
% which includes ______ % for mortgage insurance.
This interest rate is guaranteed through
settlement if you accept and sign this agreement now, and lock-in
this rate by [insert date/time]. If you choose not to accept by
this time, we guarantee that the interest rate will not exceed ______
% [over] [under] the [prime] [index] rate for _____ days [30 days
or greater]. If you do not accept within this period, this offer
will expire. If you accept this agreement, but elect not to lock-in
the rate at the time of acceptance, we further guarantee that your
interest rate will not exceed ______ % [over] [under] the [prime]
[index] rate or other standard measurement in lieu of an index when
you do lock-in.
II. GUARANTEED MORTGAGE PACKAGE
We will provide you a GUARANTEED MORTGAGE
PACKAGE for all settlement services and charges required to complete
your mortgage, except those specifically set forth in Secton IV
below, at a GUARANTEED MORTGAGE PACKAGE PRICE. You will pay this
GUARANTEED PRICE in addition to the OTHER REQUIRED SETTLEMENT COSTS
itemized in Section III. The precise services for each transaction
may vary. See Attachment A-1 for an indication of whether we anticipate
pest inspection, lender's title insurance and property appraisal
services being included in your guaranteed mortgage package.
This guaranteed mortgage package price
may include a maximum mortgage insurance premium based upon your
assertion of the value of the property and loan amount needed. The
mortgage insurance premium may decrease or be removed after full
|GUARANTEED MORTGAGE PACKAGE PRICE:
III. OTHER REQUIRED SETTLEMENT COSTS:
In addition to the GUARANTEED MORTGAGE
PACKAGE PRICE, you are or may be required to pay advanced mortgage
and hazard insurance premiums, and to establish escrow reserves
at settlement. Some of these costs may vary depending on when your
loan closes and how much insurance you are required to obtain. No
cost may be imposed on you at settlement that is not specifically
itemized and estimated in this Section other than the Guaranteed
Mortgage Package Price.
|A. Per Diem Interest (HUD-1 900 Series)
Per Diem at $ ______ @ _____ days with an estimated settlement
|B. Reserves/Escrow, (if required) (1000)*
|C. Hazard Insurance (900)
|IV. OPTIONAL OWNER'S TITLE INSURANCE (1100)
|TOTAL ESTIMATED SETTLEMENT COSTS
(SUM OF SEC. III, IV, AND V):
* Generally, pursuant to federal regulations, the
amount stated in line B may not be exceeded at settlement by more
than 10% absent unforeseeable and extraordinary circumstances.
V. OPTIONS TO PAY SETTLEMENT COST & LOWER YOUR
A. Cash Payment at Settlement: You may pay all or
part of you required settlement costs at settlement using your available
B. Borrowing Additional Funds to Pay Settlement Costs:
You may be able to pay all or part of your settlement costs by borrowing
the needed funds as part of your mortgage loan principal. If you
chose this option, your monthly payments will increase.
C. Pay Settlement Costs Through a Higher Interest
You may be able to lower your settlement costs in exchange for paying
a higher interest rate on your mortgage loan. This higher interest
rate will increase your monthly payments.
D. Lower Your Interest Rate:
You may be able to lower the interest rate on your loan by paying
additional funds at closing, commonly referred to as "discount
points." The reduced interest rate will lower your monthly
payments. The following table will show you how higher and lower
interest rates affect your loan and loan payments.
||GMPA Terms You Selected
||Higher Interest Rate
||Lower Interest Rate
|New Loan Balance
|Monthly Principle & Interest
|Change in Cash to Close From GMPA
Terms You Selected
|Change in Monthly P,I, & PMI
from GMPA Terms You Selected
VI. ADDITIONAL LOAN TERMS
||This mortgage IS subject to Prepayment Penalty.
||This mortgage IS NOT subject to Prepayment Penalty.
||This mortgage HAS a balloon payment of ______,
which will be due on ______.
||This mortgage DOES NOT HAVE a balloon payment.
Adjustable Rate Mortgage (ARM) Loans
This is an Adjustable Rate Mortgage (ARM) Loan. The
initial interest rate for this ARM loan is _______. The first adjustment
will occur after ______ months/years and every _______ months/years
thereafter for a period of _______ months/years. The interst rate
is based on adjustment. The maximum rate increase adjustment per
period is ______ and the maximum interest rate that can ever apply
to this loan is ______.
VII. Guaranteed Mortgage Package Agreement:
We are providing this GMPA to you at no cost. If you
agree to seek a mortgage loan using our services within 30 days,
by signing, dating, and returning this GMPA to us on or before ________,
along with a $______ application fee, we will be contractually bound
to the terms of this GMPA provided that you qualify for this mortgage
based on your credit rating, the appraisal, and other appropriate
Signature of Authorized Agent
Signature of Lender
Signature of Borrowers