What are contracts? These are written documents which show and prove that there is a voluntary agreement between two or more parties. A contract legally binds these parties with the rights and duties which arise from these agreements and are enforceable by law.
Contracts are Important
Contracts are used for a variety of purposes. Moreover, they are used in many different fields.
When you get a loan, say a mortgage, you enter into an agreement with a lender. At the end of the mortgage process during closing, you will be asked to sign a contract which details your entire mortgage plan and the agreement you will have with your lender.
This agreement shows how much you owe your lender, how much interest is applied unto the borrowed money, how you pay it off and until when. It also details any special conditions which will apply to your mortgage, such as a prepayment penalty or a negative amortization feature.
Are You Sure You Know What You’re Getting Yourself Into?
When you get a home financing program, you need to be fully aware of how it works.
In fact, you did your assignments and made sure you’re only getting what you need. Other than that, you are doing business with a trusted mortgage lender. Nothing can go wrong. The program has been thoroughly explained to you. All that’s left for you to do is to sign the contract and you’re good to go.
But, before you sign along the dotted line, pause and ask yourself first: “Do I really know what I’m getting?”
Why is it Important to Read the Fine Print?
Have you signed some document in the past without reading all the pages? Yes, you attempted to read the entire 20-page contract. But it the middle of it, you just eventually gave up and just signed away.
That’s the worst thing you can do when getting a mortgage.
Signing off a mortgage agreement is a major financial transaction. Remember that you are legally bound to the responsibilities associated with this home loan. The consequences of not reading the document can be very serious.
A contract exists so that you can sleep peacefully at night knowing what you got yourself into and knowing that you are in control. Signing a contract without digging deep into the fine print can result in unexpected and unforeseen consequences. The sad part is, it could have been avoided only if you took the time and patience to study your mortgage agreement.
Never sign a document blindly. You don’t want to be bombarded with financial expenses you weren’t anticipating. You don’t want to be fined because you were not careful enough to read the conditions printed on the document you signed. You don’t want to end up losing financially.
Ask for Help
If you’re having a hard time understanding what the papers say, seek professional help.
Get yourself a lawyer who can review the agreement with you. Let him explain to you the conditions of the loan. Let him make you understand the possible results when you take out a mortgage, both the benefits and the disadvantages.
It never hurts to be extra sure.
Additionally, a mortgage lender can be your advocate. They can walk you through the whole document. They will because it’s their duty to inform you about the product.
Ask them your questions. Make clarifications if you have any. The goal is to have a good grasp of the ins and outs of your mortgage program.
Again, before you sign your contract, read it carefully. It may be the one little thing that can save you from a financial disaster.