When you are in the process of searching for a new home, there are a lot of different variables that you have to take into consideration. One of the most important parts of the process is coming up with the money that you need to buy the house. If you are shopping around for a mortgage, there are specific laws that can have an impact on you as a borrower. Here are a few things to consider about mortgage laws and how they affect you.
Good Faith Estimate
The good faith estimate is a document that you will receive when you apply for a mortgage. On the document, you will see an itemized list of the fees and costs associated with getting the loan. You’ll be able to know exactly how much you are going to have to pay in closing costs. You are supposed to receive this estimate within three days of submitting your application. If you are working with a mortgage broker, you may need to get the estimate from him instead of from the lender.
Truth in Lending Act
The Truth in Lending Act is legislation that makes it easier for customers to know important information about their loans. If you are getting a mortgage loan, the lender is required by law to provide you with specific information about the loan. For example, you have to know the annual percentage rate, how many payments you will make over the life of the loan, the total that you’ll pay in interest, and other items. In the past, lenders could hide all of this information to make it harder for you to get the truth. Now, you can get the information that you need upfront.
Equal Credit Opportunity Act
Another law that can have an impact on you as a borrower is the Equal Credit Opportunity Act. This is an act that requires lenders to be willing to lend to anyone regardless of their age, sex, race, color or religion. In the past, lenders could discriminate against certain groups of people and keep them from getting loans. Now, anyone can get a loan as long as they have a good enough credit history and a sufficient income.
Home Mortgage Disclosure Act
The Home Mortgage Disclosure Act is another law that requires lenders to provide information about approved and rejected loan applications. This gives you an idea of how many loans have been approved and rejected by a particular lender within a given period of time. This act was put in forth as a way to get previously secret information about how many people get approved. The government wanted to make sure that local lenders were meeting the needs of their community by offering enough loans. This information can tell you which lenders are the most likely to approve your loan application.
All of these laws can come into play when you are applying for a new mortgage. Make sure that you understand them completely before you apply for a loan.