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Home Buying Rights
If you are thinking for the first time about buying a home then you need to be aware that the Real Estate Settlement Procedures Act (RESPA) requires moneylenders and mortgage brokers to provide a HUD information booklet within three days of applying for your loan. RESPA helps protect consumers from unscrupulous practices during the home-buying and loan process and is a federally-binding law.
Purchasing a property is the biggest financial decision most of us make. To consider it carefully you would do well to obtain all the information you can to uncover the steps involved and the pamphlet called "Shopping for your Home Loan" will help you understand the various parts of the process. You may even be uncertain whether you are ready to buy a home, and this can help you look at the financial implications to aid your planning.
It covers in detail the sales agreement, GFE's (Good Faith Estimates) to compare available loans, the additional service providers you will need to consult, the charges and fees that will be levied and the statement that you will receive upon purchase.
This booklet will help you become familiar with:
You may need help to negotiate the various stages to home ownership, including making sense of the paperwork you will have to sign. There is a useful list of contact details and glossary of terms, sample documents and a do's and don'ts list in the HUD 49 page document.
Twelve Steps to Owning a Home
In summary, you should consider the following:
With this information you will be able to make good comparisons of the services offered in your area, and identify the best loan for you. The HUD booklet also lists the charges which may vary at settlement, how to assess your points, and gives advice on which settlement services to use. There is a 'trade-off table' in the booklet to help you understand how your payments will change if you pay more settlement charges and receive a lower interest rate, or if you pay lower settlement charges and receive a higher interest rate.
The booklet also takes you through the process of settlement, including the HUD-1 Settlement Statement form in detail, servicing and escrow disclosure statements, and what happens if errors occur or if you need to make a complaint. Making your payments on time so that you do not default on your loan will enable you to avoid foreclosure, but if it happens there are steps you can take to help you keep your home. You may also want to remodel or improve aspects of your home requiring a home equity loan or refinancing.
To conclude, you should at no time experience any discrimination as a home loan applicant, but if you do the Fair Housing Act offers you protection and adjudication, or you can file a private legal action. If you are turned down for your loan, need to obtain your credit report or home appraisal, or contact any other professional bodies related to purchasing a home, the contacts list in the HUD booklet will give you a first point of contact. You can also find links to useful websites offering mortgage calculators and other online advice portals.