Buying a home can be a complicated and confusing process. It's also probably the biggest investment you'll ever make.

These two factors combined add up to this -- you need to be well informed about your home buying rights.

Here's the most valuable home buying tip you'll ever receive: Learn about RESPA. More specifically, learn about your rights under RESPA.

What is RESPA? RESPA is the Real Estate Settlement Procedures Act (RESPA). Here's how the Department of Housing and Urban Development defines it: RESPA was "enacted in 1974 to provide consumers advance disclosures of settlement charges and to prohibit illegal kickbacks and excessive fees in the home buying process."

RESPA sets procedures and requirements relating to the closing or settlement process (when home ownership is transferred from the seller to the buyer).

Settlement is a paperwork-intense process where the home buyer officially assumes the mortgage. It's an important part of the process, and as a result it is clearly defined by the government (under the RESPA act).

Again, the Department of Housing and Urban Development: "RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement…"

Your Rights Under RESPA To understand RESPA is to understand your rights as a home buyer, so it's vital that you do some reading. Start with HUD's website and read up on RESPA, particularly the part that explains your rights under the act.

A Summary of Your Rights:

You have the right to shop around for loa

ns and compare the fees and charges of various mortgage lenders. You have the right to be informed about the total cost of your loan (to include all associated fees, interest rates, and other add-ons). You have the right to receive a Good Faith Estimate of all loan and settlement charges before settlement day. You have the right to ask the mortgage lender to explain every aspect of the mortgage, line by line if necessary. You have the right to ask questions about fees and terminology you don't understand. You have the right to know why your loan was denied (if such an even occurs).

Most importantly, you have the right to learn more, by visiting one of the websites below:

www.HomeBuyingInstitute.com www.HUD.gov www.RespaReform.com

The best home buying tip you'll ever receive: Know your rights under RESPA. Be a well informed borrower and home buyer.

* Copyright 2006, Brandon Cornett. You may republish this article if you keep the byline and author's note, and also leave the hyperlinks active.

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