|
54. 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.
55. 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.
Today, the internet is an excellent resource in which to compare lenders and rates. You can apply online at no cost with many lenders from the comfort of your home. In some instances, lenders will actually bid against other lenders hoping to secure you as a customer. To find a lender or to get a quote online, go to Credit and Financing.
56. 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.
57. 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.
For more information on RESPA, visit the web page at
http:/www.hud.gov/fhq/res/respa-hm.htmI or call 1-800-217-6970 for a local
counseling referral.
58. 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.
59. BESIDES RESPA, DOES THE LENDER HAVE ANY ADDITIONAL
RESPONSIBILITIES?
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).
60. 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.
|
