|
COMPARING THE TRUE COST OF OBTAINING A HOME LOAN
Copyright 2004, W. Troy Swezey
Home buyers are often confused about where to begin in their
search for a home loan. The process is usually narrowed down to
finding which institutions provide the lowest settlement costs,
but the different types of lending institutions and the variety
of lending programs available can make the search a slow,
difficult experience.
Real estate settlement costs are fees buyers normally pay when
purchasing a home such as legal services property insurance,
mortgage loan financing and title services. In the past,
consumers would have to call each lender, request an estimate
of their settlement costs and compare all of the results to
find which lender offered the lowest total settlement costs.
The Department of Housing and Urban Development, however,
recently revised the Real Estate Settlement Procedures Act
(RESPA) which now makes it easier for consumers to estimate
various settlement costs through computer loan origination
programs. In this manner, consumers can access a computer
listing of various programs offered by lending institutions.
The computer search speeds the process of reviewing various
programs and allows participants to arrange financing with the
listed lender. Buyers using a computer loan origination program
may be required to pay a fee for this service, but many buyers
feel the convenience outweighs the cost. Still, the new RESPA
changes require a real estate broker with a computer loan
origination program to inform the buyer that the service is
only an option and that non-listed lenders may offer lower
rates or fees.
The new Federal Regulations also permit real estate brokers to
offer more comprehensive services to home buyers by allowing
brokers to enter into controlled business arrangements with
other companies associated with the home buying process. Real
estate brokers were always allowed to refer buyers to lending
institutions, title companies and escrow companies, but they were
not permitted to accept compensation from those institutions for
giving a referral. The RESPA changes now allow real estate
brokers to enter into partnerships or actually open their own
mortgage service institutions. This allows brokers to provide
virtual .one-stop shopping. by handling the entire settlement
process.
RESPA changes were made to help home buyers learn about and
obtain mortgage services more conveniently. Since RESPA helps
consumers to understand the process of home ownership, the
regulations may encourage more potential buyers and further
stimulate the real estate market.
W. Troy Swezey is the author of .COMPARING THE TRUE COST OF OBTAINING A HOME LOAN." As a Realtor at Century 21 Paul & Associates, he has helped many individuals with their real estate needs. Visit his web site to download his free e-book, .REAL ESTATE SECRETS EXPOSED.. Website or Email
|
