As a first time home owner, you might want to take a mortgage or a home loan to save on the expenses incurred in buying a house. However, mortgage companies ask its customers to be aware of the new rules and regulations, before applying for a mortgage. Since October 2015, the mortgage laws in the country have become much stricter.
Utah mortgage firms list the new rules and regulations below that safeguard the rights of both the lender and the mortgagee.
Loan Adjustments Have Been Made Stricter
If you wish to convert your loan from floating to fixed rate or refinance your mortgage, you will have to begin the entire loan taking process again. Moreover, you will have to furnish proper details as to your present credit history. This has been brought in place to protect the rights of the mortgagee and the lender.
What are The New Rules and Regulations?
Before you apply for a mortgage, consider the recent changes in the regulations governing home loans. Some of the changes are as follows:
- Stricter paperwork: Earlier the mortgagee was not required to show a detailed paperwork of his credit history. However, the changed law insists that you not only provide an income certificate but complete paperwork of your credit history, assets, and liabilities.
- Down payment made compulsory: In the past, many financial institutes would forgo the down payment required to purchase the house. However, the present set of rules and regulations have made it compulsory for the mortgagee to provide the down payment to purchase the house.
- Waiting period: The present rules and regulations have made it compulsory for the mortgagee to wait for a period of at least fourteen days, before the funds are released to him or her.
So understand your rights carefully before you apply for a mortgage.