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Basic Items a Mortgage Lender Must Disclose

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By : Sonia Smith    99 or more times read
Most American homebuyers who are using mortgage lenders to provide them a loan to buy a house could be in for a new and relevant federal consumer protection. Today, mortgage lenders have offered to provide their borrowers with a uniformed disclosure on their duties and services to be given out in the process of application. The form must be signed and clearly understood by the applicant and would insulate the fees disclosed.

Many mortgage lenders now support the new and legally binding disclosures that require the mortgage brokers to commit to a certain maximum application fee charges and to give an explanation on the origination fees and the legal nature of their services and duties to their customers. A good mortgage lender must be able to disclose the following items:

  1. Provide customers with the rates of interest and the yearly percentage rate of a loan. The APR or the annual percentage rate is a combination of the interest rate, points and other charges which is divided by the loans term.

  2. The lender should also inform you of the kind of loan that you are getting from them. Before everything else, the mortgage lender should explain the kind of loan that you qualified.

  3. Your mortgage lender must disclose the fees they impose to their customers in writing. As stated by law, they must reveal their fees after an application.

  4. The mortgage lender should also provide you a GFE or the good faith estimate of the total costs of closing and charged fees. Mortgage lenders will charge fees for the loan processing and closing the mortgage. As required by law, the closing costs must be disclosed to the applicant at least three days after the application submission.

  5. A mortgage lender must let an applicant know that they have a “lock-in” policy. Most lenders offer this kind policy, which serves as guarantee of a particular interest rate and points for a specific number of days. Because most interest rates may vary everyday, this lock-in fee could save you thousands.

  6. Lenders who benefits from a mortgage broker will have the appropriate fees due to the broker. If this is so, these fees must be disclosed to a borrower to make sure that there is no hidden agenda that could create a conflict of interest later.

  7. Mortgage lenders must also be able to inform their customers of certain risks like a rising monthly payments through advertisements, oral statements and promotional materials. Nevertheless, this communication should be used to propel subprime borrowers to adjustable mortgage rates.

The above guidelines should add up to one general conclusion. Your mortgage lender helps you achieve your dream of owning a house by providing you a loan. Everything will continue to work smoothly as long as you maintain a good relationship with your lender. When it is time for you to make your monthly payments, make sure you do it on time to avoid problems and awkward situations later.
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