Before you sign your new mortgage loan, be sure that your lender
or mortgage broker has disclosed their annual percentage rate
(APR) and their terms. Lenders are legally required by the Truth
in Lending Act to disclose the cost and terms of your financing
package before you sign any final paperwork. If a lender refuses
to reveal this information, you should find another lender who
follows the legal process.
Asking About APR
When you begin shopping to refinance your mortgage, you should
ask about the APR along with other fees and rates. The APR
includes the total interest, points, and other fees. The APR
allows you to make a quick comparison between lenders. However,
your APR could be higher if you wish to pay points for lower
interest rates.
You can call up individual lending institutions to request this
information or use an online mortgage broker. With their
websites you will receive offers from several different mortgage
lenders. They will list out their rates and fees. You may also
find better deals on closing costs or interest rates since
online lenders have reduced overhead.
Requesting Terms
Federal law requires all lending institutions to disclose loan
costs and terms before you sign for the loan. Most of the time,
lenders will send out the paperwork with your application, but
some financing companies wait until the settlement period.
Once you have your loan terms, review them carefully. The
mortgage terms will include information on finance charges,
payment schedule, and APR. You also have the right to cancel
your loan within three business days after settlement or
receiving your Truth in Lending disclosures, whichever occurs
last.
Inquiring About Application Refunds
While you have the right to rescind on your home loan, you may
forfeit your application fee depending on the lender.
Application fees for processing your loan usually total $100 to
$200, which is paid with your application. All other loans fees
are required to be refunded if you cancel your loan within the
three days of closing.
Some lenders do not refund application fees if you cancel or are
not approved. Before you apply, it is best to ask about refunds
along with rates and fees.
About the author:
See my recommended
Home
Mortgage Refinance Lenders for the lowest rates online.
Carrie Reeder is the owner of ABC Loan Guide, which offers help
finding
low rate home
mortgage loans.
