Clay Johnson: Hello again, guys. Clay Johnson here and Cheryl Knowlton with Dynamite Productions. We’re excited to be coming at you today and talk a little bit more about a precursor to the CD, which is called the Loan Estimate.
Cheryl Knowlton: Yep.
Clay Johnson: And so Loan Estimate is great because this is their kind of upfront what’s it’s supposed to be and anticipated to look like.
Cheryl Knowlton: Right, exactly.
Clay Johnson: Yeah.
Cheryl Knowlton: Keyword there being the word estimate. This is not their final closing disclosure document, and so you cannot hold the lender to, “You said it was going to be $24.82 cents for recording.” I mean, don’t get stupid about things. This is an estimate based on the program that the loan officer at the time of application feels is going to be the best fit for the consumer. That can change. They could go from a conventional to an FHA to a VA back again. I mean, it’s a lot of moving parts for you-
Clay Johnson: Right, and anytime we do that, we send it out as a supplement to the new LE. We send out what’s called a COC or a Change of Circumstance.
Cheryl Knowlton: Oh, look at that.
Clay Johnson: And so-
Cheryl Knowlton: You catch that acronym?
Clay Johnson: The Change of Circumstance kind of clearly lays out this is what changed on your LE and this is why it changed. So when we lock loan, we always send out a Change of Circumstance, says, “Hey, this is what we anticipated but we have locked your loan now. So here’s your updated Loan Estimate.” And it just really kind of clearly spells that out and so it just keeps them informed throughout the process.
Cheryl Knowlton: And that is so important because, as always, so much of what we do in real estate and lending is based on the consumers’ expectations. And you’ve got to continually remind them that this is changed, whether it goes up or whether it goes down. Sometimes it does. Interest rates fluctuate-
Clay Johnson: They do. Yeah.
Cheryl Knowlton: Loan programs change, and so you’ve got to make sure that you are continually educating your client throughout the process and reminding them, so that their expectations are clearly met and they are more than thrilled by the time they get to the signing.
Clay Johnson: Yes. Shouldn’t be a problem, guys. Contact us if you have any questions below, and until next time, we’ll see you then.
Cheryl Knowlton: See you later.