| How do I choose the best loan
program for me? |
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.
|
| What is the best way to compare
loan terms between lenders? |
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. |
| Are there any costs or fees
associated with the loan origination process? |
| 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 RESPA?? |
| 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. |
| What is a good faith estimate, and
how does it help me? |
| 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. |
| Besides RESPA, does the lender have
any additional responsibilities? |
| Lenders are not allowed to discriminate
in any way against potential borrowers. |
| What responsibilities do I have
during the lending process? |
- 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.
- Refuse to sign any blank documents.
- Do not buy property for someone else.
- Do not overstate your income.
- Do not overstate how long you have been employed.
- Do not overstate your assets.
- Accurately report your debts.
- 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.
- Be truthful I about your credit problems, past and present.
- Be honest about your intention to occupy the house.
- Do not provide false supporting documents.
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