Unfortunately, you will also find some dishonest activities in the marketplace. The good news is that home buyers are protected from the negative affects of these unscrupulous activities under the laws passed by the federal government.
As a home buyer, there are certain rights granted to you while you are searching and applying for a mortgage loan for your home. It is best to get familiar with these rights.
Borrower's Rights
There are several rights granted to you as a borrower, and a home buyer by both the Consumer Credit Protection Act and the Fair Credit Billing Act. The United States Congress passed both of these legislations.
You have the right as a home buyer:
- To shop for around for the best loan among different mortgage lenders and brokers.
- To be informed of your loan's total costs. Total coat includes interest rates, points, and other fees assessed by a lender or broker.
- To ask questions about anything you do not understand about loan charges and terms.
- To have income from child support, alimony, and pension considered in qualification for a loan.
- To know the reason for denial if your loan application is denied.
- To know what you and the lender are paying the mortgage broker for a loan.
- To be informed of any fees that will not be refunded to you if your loan agreement is cancelled.
- To receive a free copy of the credit report that was used in denial of your loan. The lender should give you information about getting this credit report.
- To be considered for a loan regardless of age gender, marital status, race, color, religion, and national origin.
- To receive an appraisal report for the home.
RESPA
The Real Estate Settlement Procedures Acts, administered by the Department of Housing and Urban Development, prevents mortgage lenders and brokers from charging particular types of fees.
Under the RESPA, it is necessary for the lenders to disclose particular information to you pertaining to your application for a mortgage. You, as a home buyer, must obtain a Good Faith Estimate from the lender or mortgage broker.
Estimation of fees that you will be charged for your mortgage is detailed in the Good Faith Estimate. If the loan is to be serviced by or transferred to another lender, the lender must also provide you with a Mortgage Servicing Disclosure Statement.
Lastly, the Special Information Booklet must be given to you as a home buyer containing information about real estate settlement services. Once your application has been received, these documents should be given to you within the next three days. The lender does not have to provide with the documents if your application is denied within three days.
You, as a home buyer, are protected from scams, discrimination, excessive fees, and other malicious business practices with these laws. You are one step closer to obtaining a home loan by educating yourself to the rights.
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