I am in the process of refinancing my mortgage. I am doing my research to get lower costs and better rates. A couple of the mortgage lenders/banks are requesting me to sign a Uniform Residential Loan Application before proceeding. By signing this document am I committing to proceed with them and can be held to any financial costs incurred on their behalf?
You are not committing to take a loan with these lenders but you might be obligated to pay the fee of processing the obligation. Ask each lender for the cost, if any, of applying.
You don't have to sign anything. Of course, the bank does not have to loan you money either. You are right to be cautious. If you are not getting what you want from one bank, obviously, go to another. Good luck.
The information provided should not be considered legal advice. I am not licensed to practice in any State other than SC. The results of your case will depend on the presentation of evidence, the law and other factors that may change depending on an in depth analysis of the facts of the case. Please see an attorney before making legal decisions.
The federal Truth in Lending Act gives you a three day right to rescind a mortgage refinancing transaction involving your principal residence. This means, that even if you cancel the transaction up to three days after the closing, they are required to refund anything that is considered a finance charge under TILA, which includes application fees, processing fees and appraisal fees. Requiring you to pay anything if you cancel the transaction prior to the closing is inconsistent with your right to cancel, and should be challenged if it happens. Once you sign the application, they are required to provide you with a good faith estimate of closing costs, within a short time period, so that you can compare the costs of one loan vs. another. The new good faith estimate forms are much more consumer friendly than the older forms, and lenders are allowed much less leway now in changing the numbers between the good faith estimate and the closing. If you have more questions, I suggest consulting an attorney who specializes in consumer law.
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