I still remember in my college days as finance major, our professor asks us to memorize the Truth in Lending Act. Those enumerated phrases actually are simple words and easy to understand even not really hard to memorize, and it has guided me in real estate.
Anyway here is the Truth and Transparency in Lending Act by the Bangko Sentral ng Pilipinas, this actually be found in financial institution like bank branches.
Truth and Transparency in Lending Act
Though, the above financial guideline is not a covered responsibility of real estate sellers but as assisting agents we can help guide buyers to be aware of their rights.
The Truth in House Financing
Applying the above Lending Act and as the main guidelines of banks, the property buyers or housing loan applicants has the right to know all information covered on the agreement they entered into with.
The Loan Amount; the interest rates; the terms of payment; if it's repricing or fixed rates; the due date or schedule of payments and penalty; if there are options for balloon payments and how will it be re-computed; the discounts if any; if there are option for re-financing; the charges and processing fees and the process of delinquency and buy back or foreclosure of property. Everything has to be crystal clear and transparent.
I have one client, the son is the principal buyer who is working abroad and his father is the attorney-in-fact called me regarding the account concerns. They already paid the down payment and the application is at the bank for processing and approval. The father who has the background in laws, informed me that he was at the bank for signing but it was postponed so he can review the fine print of the whole agreement and it’s coverage.
Every detail was asked and checked and they didn’t sign until they thought everything has been disclosed and explained.
This reminds me of the The Truth and Transparency in Lending Act. Very detailed simple phrases primarily created, put into law and been a guideline of financial institutions like banks to protect buyers and the public in entering loan agreement.
While banks have its own roles, the Bangko Sentral reminds clients or borrowers the following roles and responsibilities:
1. Analyze your need for a loan
2. Asses your capacity to pay
3. Understand loan terms and conditions especially "fine prints"
4. Keep a signed copy of loan documents
5. Use the loan proceeds as intended
6. Prioritize the payment of the loan
7. In the event of delinquency, keep communication line with the lender.
8. Do not pay loans with another loan
9. Do not borrow more than you cannot afford to pay
10. Be a responsible borrower.
At property financing, we have many banks to choose from that offers low interest rates, flexible terms and approachable staff for information we needed before signing an agreement.
So, consider all options and be aware of your rights.
Thanks for reading please share if you find it useful.