Consumer Guide to Homeownership

Information for homeowners and prospective homebuyers.

Shopping for lenders

Ensuring that your mortgage company is licensed is absolutely crucial to protect yourself when buying a new home. If a company is licensed, they have met all the requirements and regulations of the state, and therefore, have established themselves as a legitimate lending institution.

If you are in the market for a mortgage or are refinancing your home, please follow these tips:

  • Do a broad search online for interest rates in your area. Running a broad search online for rates in your area will give you a general idea of market pricing and can help you narrow down the list of lenders to approach. A helpful tool for running a general search can be found on the Consumer Protection Bureau’s website. Lender information is often found on specific lenders’ websites. Be wary of a company that is offering rates significantly lower than its competitors.
  • Confirm that your mortgage lender and broker are licensed. Both mortgage lenders and mortgage brokers must be licensed in Massachusetts. Verify that mortgage lenders and/or mortgage brokers are licensed by visiting the Division of Banks' web site for licensing information at https://www.mass.gov/lists/download-a-list-of-approved-licensees or by calling 1-800-495-BANK (2265), or by calling 1-800-495-BANK (2265).
    • Lender: Home loans are available from several types of lenders — thrift institutions, commercial banks, mortgage companies, and credit unions. The mortgage lender will determine whether, and in what amount, you qualify for a loan. Lenders also have the ability to act as brokers, so you should ask in what capacity they will be acting when you are deciding whether to use their services. 
    • Broker: Mortgage brokers do not lend money directly. Their job is to find you a lender. Such brokers have access to several lenders, which can mean a wider selection of loan products from which you can choose. Although a broker is working on your behalf, he or she may not necessarily offer the best mortgage products that may be available to you. If you choose to deal with a broker, find out how that broker is being compensated and compare the broker’s fees with other brokers.  You may ultimately decide to conduct your own research and save money by eliminating the need to pay a broker’s fee.
  • Get preapproved. Being preapproved and being prequalified for a loan are not the same. While a prequalification will give you a sense of how much money you may be eligible to borrow, it is not an offer. Prequalification is based solely on information you supply.  The preapproval process, on the other hand, is more official.  The lender requests and receives from you, the applicant, more documentation related to your financial status, employment and credit history. Although preapprovals are valid for a period of time, they often contain other conditions that you must meet before final approval for the loan is given. When you apply for a loan, the lender will pull your credit report. That inquiry of your credit report will also appear on your credit report. If this happens too often in a short period of time, your credit history and score may suffer. But for a major purchase, such as a home, the lenders who are seeking to review your credit history are potential creditors.  If their inquiries are within a short time period, typically within two weeks, collectively those inquiries will count as one hard inquiry rather than multiple inquiries.  This benefits consumers by allowing them to shop around without damaging credit history.
  • Hire an attorney, if possible. Hiring your own attorney may be in your best interest as he or she can assist you in the different stages of the homebuying process, from dealing with the seller to reviewing the purchase and sale agreement, mortgage documents and closing documents.  If you choose to hire an attorney, make sure to ask whether he or she has experience representing home buyers. Always obtain the attorney’s fee information and determine the extent of legal representation you need at the outset.
  • Submit loan applications to at least three lenders. Submitting multiple applications may save you money in the long run. When you apply for a loan, the lender can charge you an application fee for pulling your credit report.  Generally,  nothing else will be charged until you have indicated to the lender your intent to proceed with the loan. Review all estimates thoroughly.
  • Get your rate lock commitment in writing. If you choose to lock an interest rate, ensure that the rate lock commitment is in writing and that you retain a copy of the commitment. Ask whether the commitment is from the actual underwriting lender. Do not accept a rate lock commitment from a mortgage broker.
  • Verify that your rate lock commitment is from the mortgage lender, bank, or credit union. Remember that only mortgage lenders, banks, and credit unions are authorized to issue rate lock commitments. Mortgage brokers are not allowed to issue rate lock commitments. A mortgage broker, however, can obtain/arrange a rate lock in writing from the actual underwriting lender. Ask your mortgage broker to provide you with a copy of the rate lock commitment from the underwriting lender.
  • Provide all documentation to your lender or broker in a timely fashion. Throughout the mortgage application process, provide all required documentation to your lender or broker in a timely fashion and well before the rate lock expires. Obtain a copy of the Settlement Statement before closing.
  • Contact your lender or broker often throughout the mortgage application process. Call your lender or broker regularly during the mortgage application process to verify that the transaction is progressing smoothly.

Remember, a lender is expected to honor a rate lock commitment if it expires through no fault of the borrower, regardless of whether a delay was caused by either the lender or by its agents. Go to the following link for more information on when mortgage lenders must honor rate lock commitments here.

Immediately call the Division of Banks with any questions or problems regarding rate lock commitments at 1-800-495-BANK (2265) x 501. Visit the Department of Housing and Community Development's (DHCD) First Time Home Buyer programs for help in navigating the homebuying process. MassHousing provides down payment assistance and a variety of other programs for eligible homebuyers.

Additional Resources for Shopping for lenders

Using a real estate agent

Ensuring that your mortgage company is licensed is absolutely crucial to protect yourself when buying a new home. If a company is licensed, they have met all the requirements and regulations of the state, and therefore, have established themselves as a legitimate lending institution.

If you are in the market for a mortgage or are refinancing your home, please follow these tips:

  • Do a broad search online for interest rates in your area. Running a broad search online for rates in your area will give you a general idea of market pricing and can help you narrow down the list of lenders to approach. A helpful tool for running a general search can be found on the Consumer Protection Bureau’s website. Lender information is often found on specific lenders’ websites. Be wary of a company that is offering rates significantly lower than its competitors.
  • Confirm that your mortgage lender and broker are licensed. Both mortgage lenders and mortgage brokers must be licensed in Massachusetts. Verify that mortgage lenders and/or mortgage brokers are licensed by visiting the Division of Banks' web site for licensing information at https://www.mass.gov/lists/download-a-list-of-approved-licensees or by calling 1-800-495-BANK (2265), or by calling 1-800-495-BANK (2265).
    • Lender: Home loans are available from several types of lenders — thrift institutions, commercial banks, mortgage companies, and credit unions. The mortgage lender will determine whether, and in what amount, you qualify for a loan. Lenders also have the ability to act as brokers, so you should ask in what capacity they will be acting when you are deciding whether to use their services. 
    • Broker: Mortgage brokers do not lend money directly. Their job is to find you a lender. Such brokers have access to several lenders, which can mean a wider selection of loan products from which you can choose. Although a broker is working on your behalf, he or she may not necessarily offer the best mortgage products that may be available to you. If you choose to deal with a broker, find out how that broker is being compensated and compare the broker’s fees with other brokers.  You may ultimately decide to conduct your own research and save money by eliminating the need to pay a broker’s fee.
  • Get preapproved. Being preapproved and being prequalified for a loan are not the same. While a prequalification will give you a sense of how much money you may be eligible to borrow, it is not an offer. Prequalification is based solely on information you supply.  The preapproval process, on the other hand, is more official.  The lender requests and receives from you, the applicant, more documentation related to your financial status, employment and credit history. Although preapprovals are valid for a period of time, they often contain other conditions that you must meet before final approval for the loan is given. When you apply for a loan, the lender will pull your credit report. That inquiry of your credit report will also appear on your credit report. If this happens too often in a short period of time, your credit history and score may suffer. But for a major purchase, such as a home, the lenders who are seeking to review your credit history are potential creditors.  If their inquiries are within a short time period, typically within two weeks, collectively those inquiries will count as one hard inquiry rather than multiple inquiries.  This benefits consumers by allowing them to shop around without damaging credit history.
  • Hire an attorney, if possible. Hiring your own attorney may be in your best interest as he or she can assist you in the different stages of the homebuying process, from dealing with the seller to reviewing the purchase and sale agreement, mortgage documents and closing documents.  If you choose to hire an attorney, make sure to ask whether he or she has experience representing home buyers. Always obtain the attorney’s fee information and determine the extent of legal representation you need at the outset.
  • Submit loan applications to at least three lenders. Submitting multiple applications may save you money in the long run. When you apply for a loan, the lender can charge you an application fee for pulling your credit report.  Generally,  nothing else will be charged until you have indicated to the lender your intent to proceed with the loan. Review all estimates thoroughly.
  • Get your rate lock commitment in writing. If you choose to lock an interest rate, ensure that the rate lock commitment is in writing and that you retain a copy of the commitment. Ask whether the commitment is from the actual underwriting lender. Do not accept a rate lock commitment from a mortgage broker.
  • Verify that your rate lock commitment is from the mortgage lender, bank, or credit union. Remember that only mortgage lenders, banks, and credit unions are authorized to issue rate lock commitments. Mortgage brokers are not allowed to issue rate lock commitments. A mortgage broker, however, can obtain/arrange a rate lock in writing from the actual underwriting lender. Ask your mortgage broker to provide you with a copy of the rate lock commitment from the underwriting lender.
  • Provide all documentation to your lender or broker in a timely fashion. Throughout the mortgage application process, provide all required documentation to your lender or broker in a timely fashion and well before the rate lock expires. Obtain a copy of the Settlement Statement before closing.
  • Contact your lender or broker often throughout the mortgage application process. Call your lender or broker regularly during the mortgage application process to verify that the transaction is progressing smoothly.

Remember, a lender is expected to honor a rate lock commitment if it expires through no fault of the borrower, regardless of whether a delay was caused by either the lender or by its agents. Go to the following link for more information on when mortgage lenders must honor rate lock commitments here.

Immediately call the Division of Banks with any questions or problems regarding rate lock commitments at 1-800-495-BANK (2265) x 501. Visit the Department of Housing and Community Development's (DHCD) First Time Home Buyer programs for help in navigating the homebuying process. MassHousing provides down payment assistance and a variety of other programs for eligible homebuyers.

Additional Resources for Using a real estate agent

Getting a home inspection

A real estate agent can provide a comparable valuation of the property by using similar properties in the area and negotiate the purchase and sale agreement.

A real estate agent cannot maintain escrow accounts or provide legal advice.

A real estate agent may represent both the buyer and the seller. To do so, the real estate agent must provide dual disclosure to both parties and have their written consent.

Make sure that the broker is licensed by the Massachusetts Real Estate Board. This ensures that the broker meets the statutory and regulatory requirements for real estate brokers and salespeople within the Commonwealth and subjects the broker or salesperson to punishment if he or she violates the state's rules or regulations.

Additional Resources for Getting a home inspection

Foreclosure resources

Home inspectors will inspect readily accessible exposed portions of the structure of the home as well as the plumbing, heating/AC, and electrical systems. If the house was built before 1978, the owners are required to notify buyers of lead risks. Under Title 5, the owner must disclose if there is a septic tank and if so, report its condition.

A new homeowner is required to remove lead paint if there are inhabitants under the age of 6 years old.

Make sure you know the date when the baths and kitchens were last updated because home insurance policy rates may depend on it. Policy premium rates and the likelihood of a claim may depend on the age of the baths and kitchens.

Additional Resources for Foreclosure resources

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