Buying a house is a complex financial transaction. It involves a legal process that many homebuyers fail to understand fully. Your real estate broker, mortgage broker, and a lender may help you understand the home-buying process. However, not all are created equal, and some may be dishonest. To ensure you don’t suffer from deceitful acts, it best you know what your rights are as a borrower and a homebuyer.
Good mortgage companies do abide by the rules defined by both federal and state laws. Take note of the following that discusses some of your rights as a home buyer and borrower.
Not all states in the US require you to hire a lawyer when buying a house. Some homeowners think they can save some cash by skipping Real-estate attorneys. While hiring such a professional can cause you to shed some money, they can offer perks unlike any other that you may find very useful when making a home purchase.
Review complex legal contracts
For example, a Mortgage Lender already approved your mortgage application, and you’ve already found a home you wish to buy. Your mortgage lender and you will sign a contract stating the terms and conditions as well as all fees included for you to avail of the home purchase. By hiring a real estate lawyer, you’ll have an expert to check on the terms.
If there are any discrepancies or you have difficulty understand some terms and statements, you have a legal attorney specialized in such an area to explain these to you in Layman’s term. This also applies when negotiating with the seller and when signing the papers with regards to the home purchase.
Protects your rights as a homebuyer and mortgage borrower
Homebuyers and borrowers have rights, but not all know a thing or two about these privileges. For one, Fair housing rights state that everyone deserves fair considerations and treatment when applying for a home loan as homeowner protection. Mortgage lenders also need to make sure to disclose all details, rates, and fees to their borrowers, and that they have a license to operate. These are just some of the rights you have as a borrower and home buyer.
Good Read: Your Rights as a Borrower
Real-estate attorneys aim to protect your rights by reviewing any agreements and contracts. Take home inspections, for example. Although this is not a requirement, your lawyer will advise you not to skip this process as this can seal or break your home purchase. They will make sure you don’t miss the inspection period and to ensure that you, the client will receive the report afterward.
Gives professional advice when it comes to taking titles
Each type of title has its meaning, advantages, and disadvantages. If you, yourself are not familiar with JTWROS, joint tenants, and tenants in common, then you need a lawyer to understand such terms. Your attorney can explain what each term is, their pros and cons, and which one will work best for you based on your situation.
Regardless of what your race may be, your gender, color, handicap status, or nationality, you deserve fair treatment and consideration. No one, not a mortgage company or real estate brokers, etc. are to discriminate their applicants. Mortgage lenders should never increase or decrease interest rates just because the applicant is of a different race. Everyone will get equal treatment when it comes to real estate transactions be it a loan application or housing services.
If you’re one who acquired their home through a conventional mortgage, then it is important to note that your lender must automatically cancel any Private Mortgage Insurance once your home equity reaches 22%. For those with good standing, you can already request your lender to cancel your PMI once you get 20% equity. One needs to make sure you pay the mortgage on time, and you made no late payments of up 30 or more days within the past two years when requesting the removal of PMI.
Fair Credit Reporting
This act covers how major credit bureaus manage your credit information as a home buyer. This means if you find any errors or discrepancies in your credit report, you can file a dispute. This is an essential feature as such mistakes can impede their mortgage application and the home-buying process. It also allows homebuyers to acquire free credit reports yearly. This gives you the chance to manage your credit as part of your preparation in buying a house.
Mortgage lenders are to disclose all details, costs, and fees to their applicants regardless of the type of loan you’re applying for. You have the right to understand every that encompasses the mortgage, mainly how it works. You will receive a complete loan estimate which will discuss the interest rate, monthly mortgages, whether it is a fixed-rate or adjustable-rate mortgage, closing costs as well as tax and insurance estimate.
Verify Mortgage Licensing
As a home buyer and borrower, you can check if your mortgage company has a state-issued license to operate. The licensing provision requires all mortgage lenders to acquire licenses to operate legally. With the help of the Nationwide Mortgage Licensing System, you can easily verify whether or not your lender meets the state licensing requirements. It is important to note that nationally chartered banks hire loan officers, but they don’t necessarily need to have this particular requirement.
The home-buying can be quite overwhelming, but remember that there are laws to protect you. So, before you sign any agreement, make sure to read and understand all the terms. It would be best to find a reliable real estate lawyer to help you better understand the clauses and your rights.
When you finally understand what each type of taking a title entails, you’ll be able to have a better understanding of the pitfalls that may arise in the future so that you can be ready as early as now. For example, buying a house you wish to put under your name needs a different title compared to homes purchased with your significant other. If you and your partner decide to take separate paths, you’ll know about the legal consequences both of you will need to face.
You can buy a house without a lawyer – but knowing a legal professional can give you expert advice, protect your rights and even review complex contracts for you can give you a peace a mind when buying your home. Make the experience an even better one by hiring a good property lawyer for your next home purchase.
Mr. Friscia began his legal career working on complex private equity M&A transactions for the New York City law firm of Schulte Roth & Zabel. Mr. Friscia left the world of Big Law in order to devote himself to a more client-centered practice in which he could directly impact the lives of individuals struggling to survive the current economic crisis. Consequently, Mr. Friscia founded Friscia & Associates LLC (the “Firm”).
Mr. Friscia’s practice focuses primarily on foreclosure defense, short sales, real estate closings, bankruptcy, and business law. As a native of New Jersey, Mr. Friscia takes a special interest in his foreclosure defense and modification practice, as it offers him the unique opportunity to help keep members of his community in their homes. As the Firm has grown, Mr. Friscia remains dedicated to the principle of personal attention and close client contact. With this in mind, he is personally engaged in virtually all of the Firm’s active matters, ranging from foreclosure defense cases to residential closings.