As a borrower, you have legal protections and rights under federal law. Know your rights before you agree to take out a loan.
You have the right to a good-faith estimate of your loan’s closing costs.
Within three days of your loan application, your lender or mortgage broker is required to give you a good-faith estimate of specific closing costs, including fees they charge (such as loan origination fees), fees others charge (such as appraisal or title insurance fees), and the amount you will have to put into an escrow account to cover things like property taxes and insurance.
You have the right to get information about your loan terms in writing.
Three days before you close on your loan, your lender must tell you in writing:
• The finance charge on the loan (including costs for things like origination fees, points and mortgage insurance)
• The annual percentage rate on your loan
• The amount of your loan
• The total amount you will repay, including all principle and interest
• Your monthly payment
• Any special terms, such as a variable interest rate or balloon payment
You have the right to get a loan without fear of discrimination.
Lenders can consider many things when deciding whether to give you a loan and what loan terms you qualify for. However, they may NOT consider your race, sex, religion or nationality. Fair lending laws strictly forbid discrimination in lending.
You have the right to change your mind.
You three days (excluding Sunday) after signing a home equity loan contract to cancel the deal, for any reason. To cancel the contract, you must notify the lender in writing. Send your letter by certified mail with a return receipt requested. Keep copies of your letter and all other paperwork. Within 20 days, you must receive a full refund of any money you paid to the lender.
A credit counselor can tell you more about your rights
A qualified credit counselor can give you more valuable information about your legal rights as a borrower, including Home Owners' Equity Protection Act (HOEPA), and extra protections you might have from state or local laws.
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