Home Buying Borrowers Bill Of Rights
By Kurt Real Estate Nov 23, 2019
Borrower’s Bill of Rights
you have the right to:
Your lender has a responsibility to act ethically and with your best interests in mind. Some lenders take advantage of the great complexity of the process in order to profit at the consumer’s expense. Unfortunately, federal and state laws only provide limited protection, since many “shady” practices are legal (the laws can’t cover everything).
Loan.com has developed a Borrower’s Bill of Rights. Although lenders are not obligated by law to deliver most of these rights, we believe every lender has an ethical responsibility to provide all of them to every borrower. The lenders in our ethical rate directory have attested that they adhere to these principles.
1. Competitive Rate QuoteImage title
2. Rate Quote That Won’t Change
3. Accurate Explanation of Credit Status
4. Fair Fees
5. Upfront, Full Disclosure of All Lending Fees
6. Accurate Closing Date
7. Immediate Notification of Underwriting Issues
8. Confirmation of a Rate Lock
9. Exceptional Customer Service
10. Advocacy With Lender/Underwriter
11. No Surprises at Closing
12. Help After the Closing
13. Competitive Rate Quote
You are a victim of price gouging when you are entitled to a better loan rate than you receive. Ethical lenders price according to your individual credit and price the loan competitively.
See our Loan Analyzer and Best Rates Directory to see if your loan is priced fairly.
14. Rate Quote That Won’t Change
“Lowballing”, also called bait & switch, is too common in the mortgage business. You have the right to a rate quote that won’t change. If the quote does change, it should only be for valid reasons (such as underwriting issues).
To learn more about rate lowballing and how to avoid it, consult: Is my broker/lender ethical?.
15. Accurate Explanation of Credit Status
An ethical loan provider will help you obtain and understand your credit report, assess any issues in the report (without blowing them out of proportion) and help you fix those issues.
See: How do I interpret my credit report? in our Truth About Loans Center.
16. Fair Fees
Unethical lenders charge borrowers excessive fees. Because these costs can be financed, they are easy to disguise or downplay. Since they’re based on your credit profile and financial profile, fees vary from person to person, but they usually run around 1% to 1.5% of the loan amount for prime borrowers and 2% – 4% for sub-prime borrowers.
17. Upfront, Full Disclosure of All Lending Fees
You have the right to full disclosure of all fees. Some lenders may try to spring additional fees on you at the closing, when you feel pressured to close. An ethical lender will provide and abide by an upfront, accurate disclosure of all lending fees.
18. Accurate Closing Date
Your closing date shouldn’t slip. If you’re purchasing a home, closing on a specific date may be critical to the timing of your move. If you’re refinancing, delays might cost you money (in terms of higher rates) or delays getting the funds you need. An ethical lender meets the closing date.
See: How long should it take – why so long?
19. Immediate Notification of Underwriting Issues
You have the right to immediate notification of underwriting issues. This allows you to address the issues or look for another lender. An ethical lender will work with you to address any issues immediately to keep the closing date from slipping or causing the rate to change.
20. Confirmation of a Rate Lock
You have the right to lock a rate. An ethical lender will lock your rate at your request and provide confirmation in writing. See: When to Lock?
21. Exceptional Customer Service
You have the right to exceptional customer service. An exceptional lender provides world class service. They should:
Be reachable at your convenience (ask for a cell number)
Have a “back up” contact at their office if they are unavailable
Help you complete all of the paperwork
Use overnight or courier services to expedite your paperwork
Have convenient notary services available (some come to your home/office)
Have a simple closing process
Answer all of your questions, referring you to other experts as necessary
22. Advocacy With Lender/Underwriter
You have the right to a lender that acts as your advocate with the loan underwriter. Your broker/lender should effectively manage the process with this person for you by:
Pushing for fast approval
Getting feedback on what’s missing in your file to complete the process
Getting a rate lock ASAP (see: When to Lock?)
Helping you address any issues that arise from the underwriter
23. No Surprises at Closing
You have the right to no surprises at closing. While things can always change, with an ethical lender there shouldn’t be any unwarranted surprises at the closing — no changes in loan terms and no previously undisclosed fees.
24. Help After the Closing
You have the right to assistance after closing. After the closing, an ethical lender will continue providing prompt and clear answers to your questions and concerns as they develop over the life of your loan.
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