North Carolina has some of the toughest laws against unfair loans in the nation and was the first state to adopt a comprehensive law against predatory home loans. These laws help protect you from bad loans.
Applying for a home loan is a very stressful time for any consumer, whether experienced or not. But there are a few things you can do to make your experience a little easier to manage.
Make sure that you have received, read and understood all required disclosure documents before closing. There is no option to change your mind once you have signed the paperwork.
Ask about fees and points. The interest rate is not the only important term of a loan. A loan with a low interest rate but high fees and points may cost you more than a loan with a higher interest rate and lower fees.
If you are considering a loan with a variable interest rate, make sure you understand which conditions will change your rate and the amount your rate could change. Don't find yourself in trouble when the rate suddenly jumps.
Watch out for hidden terms, such as prepayment penalties, which are fees you'll have to pay if you pay off your loan early or sell your house, and balloon payments, which are large payment due at the end of your loan.
Review all documents with an attorney before signing.
Make sure the loan terms at closing are the same as what you were told earlier and that no additional fees have made their way in. If so, walk away.
Contact a nonprofit credit counseling agency for help deciding if you can afford a loan. Check with the National Foundation for Credit Counseling at 1-800-388-2227 to find a reputable local counselor.
Make sure the lender and broker you're dealing with are both licensed. Check with the North Carolina Office of the Commissioner of Banks at (919) 733-3016.