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Understanding
Your Mortgage Options
Explaining
Equity Loans
Time
For A Refinance Loan?
Is
A Home Equity Loan Right For Me?
Home
Loan Tax Breaks?
Glossary
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Understanding
Your Mortgage Options
Searching
for a mortgage is one of the most important challenges a person
can undertake. Millions of people do it every year, but many of
them do not put as much importance on the search as they should.
Mortgage rates change from company to company so it is very
important that you test out and get as many quotes as possible to
get the best rates possible. A mortgage essentially pledges a
property to the lender as security for payment of a debt. Also,
learn about the different types of loans you can get. It does
make a difference.
An adjustable-rate mortgage (ARM) has
a low interest rate in the early years, while a fixed-rate
mortgage stays constant at a higher rate. With an ARM, you'll pay
less for short-term ownership of your house. On the other hand,
if you think you may keep your home for more than 5 years, a
predictable fixed-rate mortgage is probably a better choice for a
loan.
Some unscrupulous lenders will attempt to take
advantage of innocent consumers. The Equal Credit Opportunity Act
(ECOA) and the Fair Housing Act (FHA) protect you against
discrimination when you apply for a mortgage to purchase,
refinance, or make home improvements.
Your
Rights Under ECOA
The
ECOA prohibits discrimination in any aspect of a credit
transaction based on:
race or color;
religion;
national
origin;
sex;
marital status;
age (provided
the applicant has the capacity to contract);
the applicant’s
receipt of income derived from any public assistance program;
and
the
applicant’s exercise, in good faith, of any right under the
Consumer Credit Protection Act, the umbrella statute that
includes ECOA.
Your Rights Under FHA
The
FHA prohibits discrimination in all aspects of residential
real-estate related transactions, including:
making loans to
buy, build, repair, or improve a dwelling;
selling,
brokering, or appraising residential real estate; and
selling or
renting a dwelling.
It also
prohibits discrimination based on:
race or color;
national
origin;
religion;
sex;
familial status
(defined as children under the age of 18 living with a parent or
legal guardian, pregnant women, and people securing custody of
children under 18); and
handicap.
Lender
Do’s and Don’ts
Lenders
must:
consider
reliable public assistance income in the same way as other
income.
consider
reliable income from part-time employment, Social Security,
pensions, and annuities.
consider
reliable alimony, child support, or separate maintenance
payments, if you choose to provide this information. A lender
may ask you for proof that this income is received consistently.
if a co-signer
is needed, accept someone other than your spouse. If you own the
property with your spouse, he or she may be asked to sign
documents allowing you to mortgage the property.
Lenders
cannot:
discourage you
from applying for a mortgage or reject your application because
of your race, national origin, religion, sex, marital status,
age, or because you receive public assistance income.
consider your
race, national origin, or sex, although you will be asked to
voluntarily disclose this information to help federal agencies
enforce anti-discrimination laws. A creditor may consider your
immigration status and whether you have the right to remain in
the country long enough to repay the debt.
impose
different terms or conditions, such as a higher interest rate or
larger down payment, on a loan based on your race, sex, or other
prohibited factors.
consider the
racial composition of the neighborhood where you want to live.
This also applies when the property is being appraised.
ask about your
plans for having a family. Questions about expenses related to
your dependents are permitted.
refuse to
purchase a loan or set different terms or conditions for the
loan purchase based on discriminatory factors.
require a
co-signer if you meet the lender’s standards.
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