FINANCING - FINDING the RIGHT LOAN for YOU
HOW DO I CHOOSE THE BEST LOAN - PROGRAM FOR ME?
Answer: Your
personal situation will determine the best kind of loan for you.
By asking yourself a few questions, you can help narrow your search
among the many options available and discover which loan suits you
best.
| Do you expect your finances to changeover the next few years? | |
| Are you planning to live in this home for a long period of time? | |
| Are you comfortable with the idea of a changing mortgage payment amount? | |
| Do you wish to be free of mortgage debt as your children approach college age or as you prepare for retirement? |
Your lender can help you use your answers to questions such as these to decide which loan best fits your needs.
FIND A MORTGAGE FOR YOUR HOME BY STATE:
WHAT IS THE BEST WAY TO COMPARE LOAN TERMS BETWEEN LENDERS?
Answer: First,
devise a checklist for the information from each lending institution.
You should include the company's name and basic information, the
type of mortgage, minimum down payment required, interest rate and
points, closing costs, loan processing time, and whether prepayment
is allowed.
Speak
with companies by phone or in person. Be sure to call every lender
on the list the same day, as interest rates can fluctuate daily.
In addition to doing your own research, your real estate agent may
have access to a database of lender and mortgage options. Though
your agent may primarily be affiliated with a particular lending
institution, he or she may also be able to suggest a variety of
different lender options to you.
WHAT IS RESPA?
Answer: RESPA
stands for Real Estate Settlement Procedures Act. It requires lenders
to disclose information to potential customers throughout the mortgage
process, By doing so, it protects borrowers from abuses by lending
institutions. RESPA mandates that lenders fully inform borrowers
about all closing costs, lender servicing and escrow account practices,
and business relationships between closing service providers and
other parties to the transaction.
For
more information on RESPA call 1-800-569-4287 for a local counseling referral.
ARE THERE ANY COSTS OR FEES ASSOCIATED WITH THE LOAN ORIGINATION
PROCESS?
Answer: Yes.
When you turn in your application, you'll be required to pay a loan
application fee to cover the costs of underwriting the loan. This
fee pays for the home appraisal, a copy of your credit report, and
any additional charges that may be necessary. The application fee
is generally non-refundable.
WHAT IS A GOOD FAITH ESTIMATE, AND HOW DOES IT HELP ME?
Answer: It's
an estimate that lists all fees paid before closing, all closing
costs, and any escrow costs you will encounter when purchasing a
home. The lender must supply it within three days of your application
so that you can make accurate judgments when shopping for a loan.
WHAT RESPONSIBILITIES DO I HAVE DURING THE LENDING PROCESS?
Answer: To
ensure you won't fall victim to loan fraud, be sure to follow all
of these steps as you apply for a loan:
| Be sure to read and understand everything before you sign. | |
| Do not buy property for someone else. | |
| Refuse to sign any blank documents. | |
| Do not overstate your income. | |
| Do not overstate your assets. | |
| Do not overstate how long you have been employed. | |
| Do not change your income tax returns for any reason. Tell the whole truth about gifts. Do not list fake co-borrowers on your loan application. | |
| Accurately report your debts. | |
| Be truthful about your credit problems, past and present. | |
| Do not provide false supporting documents. | |
| Be honest about your intention to occupy the house |
BESIDES RESPA, DOES THE LENDER HAVE ANY ADDITIONAL RESPONSIBILITIES?
Answer: Lenders
are not allowed to discriminate in any way against potential borrowers.
If you believe a lender is refusing to provide his or her services
to you on the basis of race, color, nationality, religion, sex,
familial status, or disability, contact HUD's Office of Fair Housing
at 1-800-669-9777 (or 1-800-927-9275 for the hearing impaired).
