Whether you are buying a new house or looking to remortgage your current house, changes in the mortgage industry means getting a loan affects you. While some naysayers worry this will have a negative impact on the housing market, the changes are there to protect homebuyers from predatory lenders. Be on the lookout for three key things to protect yourself and you will see the changes make the housing market a better place for everyone.
#1 The Application Loophole – The application loophole is still in place but it is still nothing scary. Application fees are still charged by legitimate and illegitimate places alike. The one thing you need to be aware of is you do not need to feel pressure to stay with a place just because you paid the application fee. You can back out at any time if you find a better lender or you just do not like the company.
#2 The Safe Act is for Your Protection – The Safe Act states a loan writer must pass a test before they can write a loan. This works to your advantage. You can ask the person you are working with if they have passed the test. If they have not, then you know they cannot possibly write the loan. This means they are either a negotiator, agent, or some other type of go between but they are not a lender. You can find this out before you pay your application fee and before you decide if you want to work with them.
#3 The Good Faith Estimate – As of January 2010, the laws changed about when lenders had to tell you about changes. Now lenders must tell you within 3 days of finding out about changes. They also must give you time before closing. This gives you time to think about what you are signing instead of springing it on you last minute.
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