Wednesday September 8, 1999 |
The mortgage industry is booming to meet skyrocketing demands for home mortgage loans. It's a jungle out there. Smart consumers who do their homework get the best deals, while complacent consumers risk paying inflated rates. Remember that the buyer beware rule applies no matter where you shop for and purchase a mortgage, says Richard Roll, president of American Homeowners Association. Whether you borrow from a savings and loan, mortgage company, bank, credit union or mortgage broker, always shop around and compare interest rates and closing costs. For more information, go to http://www.ahahome.com Many consumers don't understand the role of mortgage brokers. On a national basis, mortgage brokers handle about half of all mortgage transactions annually. The mortgage broker processes your application and submits it to a mortgage bank or savings and loan, which then underwrites and closes the loan. A mortgage broker's job is to find the best loan product for you and handle the loan origination process. Once that's over with, the actual loan provider takes over with servicing and closing the loan. That's how it's supposed to work. But some mortgage brokers may receive fees from certain lenders for steering consumers toward those lenders' products. That's not necessarily a bad thing, so long as the broker gives you the straight facts, and you end up with a good deal. But mortgage brokers may promote loans on which they make the largest fees, not necessarily ones with the best rates. Fortunately, all consumers have certain rights under federal law. Before you enter into any loan agreement, remember you have the right to: ” Be informed about the total cost of your loan including the interest rate, points and other fees. ” Ask for a good faith estimate of all loan and settlement charges before you agree to the loan and pay any fees. ” Know what fees are not refundable if you decide to cancel the loan agreement. ” Ask your mortgage broker to explain exactly what the mortgage broker will do for you. ” Know how much the mortgage broker is getting paid by you and the lender for your loan. ” Ask questions about charges and loan terms that you do not understand. ” Receive a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance. ” Know the reason if your loan was turned down. ” Ask for the HUD settlement costs booklet Buying Your Home.
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