Be Informed
Don’t sign an application or contract without understanding all the terms of the loan. Originators should be willing to explain all loan terms and conditions.
No Pressure
Don’t allow yourself to be pressured into a loan. Reputable mortgage originators strive to make consumers aware of and comfortable with their loan options.
Use Caution
Never sign blank forms in a loan package and be sure to get copies of all documents bearing your signature. If a broker is asking you for personal information that doesn’t seem relevant to the transaction, ask them for further clarification before providing private data.
Ask Questions
Question any fees you do not understand. Question terms you don’t understand. Question guidelines or explanations that don’t make sense.
Shop Around
Shop around for a loan originator that you are comfortable with. There are lots of choices for assistance. Don’t take your real estate agent’s word as the gospel. When you are unfamiliar with the process of home financing (read: newbies) meeting at least three providers is the best way to end up pleased with your experience.
Determine Affordability
Make sure that you can afford the proposed monthly payments. Do not agree to payments that you cannot comfortably make.
Know Your Rights
With a refinance transaction you have a three days to cancel for any reason if you are unhappy with the loan. This is called the three-day “Right of Rescission”.
Check the licensing of your originator
Licensing is new to Colorado as of January 1st, 2008. Not all originators have to be background checked & licensed. Surprisingly those that work for big federal and state banks are exempt!! Make sure your originator is licensed to originate mortgage loans. Are they certified? Are they participating in continuing education? Are they making sure they are up-to-date on all loan policies and applicable laws? Are they bonded & insured? Don’t assume that just because they work for a bank that the answer is yes. Oftentimes, it won’t be.
Beware of Unwanted Solicitations
Beware of e-mail & telephone solicitations, especially if they sound too good to be true. Option ARMS which contain negative amortization were marketed in mass through direct mail and e-mail campaigns.
Use an Expert – If the broker belongs to the Colorado Association of Mortgage Brokers (CAMB) than they are required to adhere to the Association’s Code of Ethics & Standards of Professional Practice, which prescribe the highest level of ethical and professional guidelines. Make sure that your broker belongs to CAMB before you make your decisions. Visit CAMB
Attribution: (California Association of Mortgage Brokers)