Buying a home is a big step in anyone’s life, and for many people, getting a home loan in order to buy a home is the most significant debt they will ever get. Buying a home is not a simple process; it involves a series of complex steps that trigger the application of a variety of different state and federal laws and regulations.

Additionally, the sale of a home affects the legal rights and obligations of both buyer and seller in different ways. It is therefore essential that all prospective homeowners be warned of their rights, responsibilities and obligations before becoming homeowners.

 Qualifying for a home loan

As the buyer of a typical home does not have the cash to buy his house, a buyer must qualify for a home loan. A buyer must apply for a home loan through a bank or other lending institution. The law On Equal Credit Opportunities safeguards your right to obtain a credit, and protects you from a negative as a result of your gender, age, race, religion and / or nationality of origin.

However, depending on the loan amount requested, the buyer’s income-debt ratio, income, assets and credit score, the lender may approve or deny your mortgage loan application. These factors also affect the terms of the mortgage loan offered, in terms of interest rates, the duration of the loan, and whether the lender will require the purchase of private mortgage insurance at an additional cost to the buyer.

As an applicant for a mortgage loan, you also have certain legal rights under the federal law known as the law On Settlement Procedures for Real Estate (“RESPA”). When you apply for a home loan, the lender must provide you with certain information, including a Good Faith Estimate regarding the amount of Service Transfer Statement, of the settlement fees you will face if your loan is approved, and a Statement of Disclosure Of the Service the mortgage, who transfers your loan to another financial institution, as well as the procedures for making a complaint. You should receive this information at the time you apply for your loan, or receive it in the mail within three business days of your request. If the lender denies your loan application within three days, however, the lender does not need to comply with these aspects of RESPA.

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