5 Rights Every Home buyer And Mortgage Borrower Needs To Know

5 Rights Every Home buyer And Mortgage Borrower Needs To Know

Buying a house is a complex financial transaction. It involves a legal process that many homebuyers fail to understand fully. Your real estate broker, mortgage broker, and a lender may help you understand the home-buying process. However, not all are created equal, and some may be dishonest. To ensure you don’t suffer from deceitful acts, it best you know what your rights are as borrower and a homebuyer.

Good Houston mortgage companies do abide with the rules defined by both federal and state laws. Take note of the following that discusses some of your rights as a home buyer and borrower.

Fair Housing

Regardless of what your race may be, your gender, color, handicap status or nationality, you deserve fair treatment and consideration. No one, not a mortgage company or real estate brokers, etc. are to discriminate their applicants. Mortgage lenders should never increase or decrease interest rates just because the applicant is of a different race. Everyone will get equal treatment when it comes to real estate transaction be it a loan application or housing services.

Homeowner Protection

If you’re one who acquired their home through a conventional mortgage, then it is important to note that your lender must automatically cancel any Private Mortgage Insurance once your home equity reaches 22%. For those with good standing, you can already request your lender to cancel your PMI once you get 20% equity. One needs to make sure you pay the mortgage on time, and you made no late payments of up 30 or more days within the past two years when requesting the removal of PMI.

Good Read: How to Dump PMI ASAP

Fair Credit Reporting

This act covers how major credit bureaus manage your credit information as a home buyer. This means if you find any errors or discrepancies in your credit report, you can file a dispute. This is an essential feature as such mistakes can impede their mortgage application and the home-buying process. It also allows home buyers to acquire free credit reports yearly. This gives you the chance to manage your credit as part of your preparation in buying a house.

Clear Disclosures

Mortgage lenders are to disclose all details, costs, and fees to their applicants regardless of the type of loan you’re applying for. You have the right to understand every that encompasses the mortgage, mainly how it works. You will receive a complete loan estimate which will discuss the interest rate, monthly mortgages, whether it is a fixed-rate or adjustable-rate mortgage, closing costs as well as tax and insurance estimate.

Good Read: Differences Between ARM and Fixed Rate Mortgages

Verify Mortgage Licensing

As a home buyer and borrower, you can check if your mortgage company has a state-issued license to operate. The licensing provision requires all mortgage lenders to acquire licenses to operate legally. With the help of the Nationwide Mortgage Licensing System, you can easily verify whether or not your lender meets the state licensing requirements. It is important to note that nationally chartered banks hire loan officers, but they don’t necessarily need to have this particular requirement.

The home-buying can be quite overwhelming, but remember that there are laws to protect you. So, before you sign any agreement, make sure to read and understand all the terms. It would be best to find a reliable real estate lawyer to help you better understand the clauses and your rights.

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