Embracing Homeownership as Summer Approaches

Summer is a popular time for homebuying, and for good reason. In addition to the increased inventory, the warm weather and longer days make it easier for you the homebuyer, to browse neighborhoods, attend open houses, and move in and get settled.

While exciting, the homebuying process can feel complex and daunting, especially for the first-time homebuyers. From searching for the right property to navigating financing options and legal procedures, there are numerous factors to consider and steps to take along the way. Fortunately, there are laws and regulations in place to protect prospective homebuyers and ensure fair and transparent real estate transactions. These measures guard homebuyers against fraudulent practices, discrimination, and unfair lending.

Here are some of the laws that safeguard homebuyers:

• Fair Housing Act :This federal law prohibits discrimination in all aspects of “residential real-estate related transactions”. It's important to note that under this law, discrimination based on sex, including sexual orientation or gender identity, race or color, national origin, religion, disability, or family status is illegal.
• Equal Credit Opportunity Act (ECOA) :This law ensures all buyers are treated fairly, regardless of race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance programs.  
• Truth in Lending Act (TILA): This law requires lenders to disclose key terms and costs of a mortgage, including the annual percentage rate (APR), total finance charge, and the total amount to be repaid over the life of the loan, empowering buyers to make informed decisions and avoid predatory lending practices.

Additionally, both the Fair Housing Act and Equal Credit Opportunity Act extend protection against appraisal bias. Appraisal bias occurs when an appraiser considers factors such as the race or ethnicity of a homeowner or the racial or ethnic composition of a neighborhood when determining a home’s value. Appraisal bias in home valuations leads to inequity in housing values and adversely impacts opportunities for minority communities to build wealth through homeownership.

Understanding these laws and regulations can prove to be essential for homebuyers trying to protect their rights and make well-considered decisions throughout the homebuying process. If you're considering purchasing a home or simply want a better understanding of the homebuying process, you can reach out to HUD certified housing counselors for independent, expert advice customized to your housing needs. Also, your credit union may have a housing counselor who can provide education and answer your homebuying questions.

As you continue your homebuying journey, be sure to use NCUA’s educational resources along the way. And if you’ve experienced problems with a mortgage loan from your credit union, submit a complaint with the NCUA Consumer Assistance Center.