Sadly, dishonest activity exists in the marketplace. The good news is that the federal government has passed laws that protect home buyers from the negative affects of these unscrupulous activities. As a home buyer, there are certain rights granted to you as you search and apply for a mortgage loan for your home. Being aware of the rights helps protect you.



Borrowers Rights

As a borrower, and a home buyer, there are several rights granted to you by both the Consumer Credit Protection Act and the Fair Credit Billing Act. Both of these are legislation passed by the United States Congress.

You have the right as a home buyer:

- To shop for around for the best loan among different mortgage lenders and brokers.

- To be informed of your loans total costs. This includes interest rates, points, and other fees assessed by a lender or broker.

- To be informed of any fees that will not be refunded to you in the event that you cancel the loan agreement.

- To know the reason for denial if your loan is turned down.

- To receive a free copy of the credit report that was used in denial of your loan. The lender should give you information about obtaining this credit report.

- To have income from child support, alimony, and pension considered in qualification for a loan.

- To ask questions about anything you do not understand about loan charges and terms.

- To know what you and the lender are paying the mortgage broker for a loan.

- To be considered for a loan regardless of age (unless under the legal age to sign a contract), gender, marital status, race, color, religion, and national origin.

- To receive an appraisal report for the home.

RESPA

The Real Estate Settlement Procedures Acts, administered by the Department of Housing and Urban Development, prevents mortgage lenders and brokers from charging certain types of fees.

Lenders are required, by the RESPA to disclose certain information to you pertaining to your application for a mortgage. You, as a home buyer, must receive a Good Faith Estimate from the lender or mortgage broker. The Good Faith Estimate, or GFE, details an estimate of fees that you will be charged for your mortgage. The lender must also provide you with a Mortgage Servicing Disclosure Statement if the loan is to be serviced by or transferred to another lender.

Finally, the Special Information Booklet, containing information about real estate settlement services, must be given to you as a home buyer. These documents should be given to you within three days after your application has been received. In the event that your application is denied within three days, the lender does not have to provide with the documents.

These laws have been put into place to protect you, as a home buyer, from scams, discrimination, excessive fees, and other malicious business practices. Educating yourself to the rights you have as a home buyer brings you one step closer to obtaining a home loan. Present yourself to mortgage lenders and brokers as a home buyer that is aware of the rights provided by the law.