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CHAPTER VIII -- HOMEWORK TIME

LESSON 18: WHAT LENDERS MUST DO

You should be aware that several federal laws protect you during the processing of your loan. The Equal Credit Opportunity Act, the Fair Housing Act, and the Fair Credit Reporting Act prohibit discrimination and provide you with the right to certain credit information. Meanwhile, the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) require mortgage lenders and brokers to provide certain disclosures and forms to you when you apply or shortly thereafter.

Here, in a nutshell, are some of the required forms you should expect to receive:

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Good Faith Estimate (GFE)
This is a detailed list of closing costs that the lender must provide to you within three business days of the time you apply for the loan. You should ask for the GFE before committing to a loan so you have a pretty good idea of how much your loan will really cost you. At the same time, remember that the GFE is an estimate. The actual closing costs you end up paying may differ. You'll want to compare the GFE to the final list of costs you receive around closing time and ask your lender about any changes. See Tips

TILA statement
This tells you the annual percentage rate, or APR, of your loan. APR is a figure that shows what the loan would cost you on an annualized basis, given the loan's rate and the fees associated with obtaining it. The APR figure is generally higher than the stated or advertised interest rate. Unfortunately, APR isn't a very good tool for comparing mortgage loans because not all loan fees are included in the APR calculation. Some lenders exclude certain fees while others don't, leaving you without an "apples to apples" comparison of loan costs.

Remember

Some fees -- including property appraisal, title search and insurance, notary and some recording fees, credit report and flood certification -- don't have to be included in the APR quote. Get your lender to spell out each of the costs.

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TABLE OF CONTENTS

CHAPTER I
  Lesson 1
  Quiz

CHAPTER II
  Lesson 2
  Quiz

CHAPTER III
  Lesson 3
  Lesson 4
  Lesson 5
  Quiz

CHAPTER IV
  Lesson 6
  Lesson 7
  Quiz

CHAPTER V
  Lesson 8
  Lesson 9
  Quiz

CHAPTER VI
  Lesson 10
  Lesson 11
  Quiz

CHAPTER VII
  Lesson 12
  Lesson 13
  Lesson 14
  Quiz

CHAPTER VIII
  Lesson 15
  Lesson 16
  Lesson 17
  Lesson 18
  Quiz

CHAPTER IX
  Lesson 19
  Quiz

CHAPTER X
  Lesson 20
  Quiz

CHAPTER XI
  Lesson 21
  Quiz

CHAPTER XII
  Lesson 22
  Lesson 23
  Lesson 24
  Quiz

CHAPTER XIII
  Lesson 25
  Lesson 26
  Lesson 27
  Quiz

CHAPTER XIV
  Lesson 28
  Lesson 29
  Lesson 30
  Quiz

Definitions





RELATED STORIES

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How to calculate the APR on a mortgage


Seven steps to a mortgage -- who will be my lender?

 
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