1. Disclosures – Check Out
    1. Truth and Lending Act - http://www.smartagreements.com/bltopics/Bltopi41.html
    2. The annual percentage rate and how much it will cost you over time
  2. The “Load”
    1. The load or fee that you will be paying for the loan is sometime hard to understand, so make sure you get completely clear about what the “load” entails before moving forward with the loan.
  3. Variable Rates 
    1. They are extremely, actually impossible to predict with any consistent accuracy. Ask your mortgage lender, “How high can the interest rate go on my loan?” Make sure you are clear about the answer before proceeding with the loan. This is super important, because if the interest rate environment starts to increase, you need to look at how your payment will be affected to determine if you can afford the increase in the monthly payment.
  4. Mortgage Lenders
    1. Obviously, the mortgage lender wants to close the loan, so they can be paid. This is normal and justified for a good service that benefits us all. However, if the mortgage lender does not answer your questions and/or seems hesitant around disclosing information about your loan, then it is probably best to go somewhere else.
  5. Refinancing
    1. When you apply for a refinance loan the mortgage lender is required to give you the Truth and Lending disclosure on the same day as the closing! Make sure you ask for it beforehand, so you have time to go over it in detail and do not feel the pressure of the other people waiting before you sign it.

 

3 Problems that need Fixing:

  1. Mortgage Loan forms are complicated – they need to be streamlined!
    1. This will take quite a while and might even require a new law.
  2. Financial literacy needs expanding! – One more reason to come to Compareyourloans.com! J
  3. Sub-prime loans are complicated – It is hard to shop for a product that you do not understand. Please check out the “Mortgage Preparation and Process” link located under “Useful Tools” and under the “Reference Guide” on the Compareyourloans.com website.

 

All the Best,

Philippe Volo

CompareYourLoans Contributing Editor