Educate Yourself

THE CONSUMER’S RIGHT TO FAIR LENDING: Sample Statutes

The Fair Housing Act and the Equal Credit Opportunity are just two of the statutes that protect debtors and borrowers. The former is the law that prohibits discrimination in the sale of houses or issuance of loans based on the race, religion, color, national origin, gender, familial status or being handicapped. The latter, on the other hand, bars discrimination in any aspect of credit transactions or in the exercise of any right stipulated by the Consumer Credit Protection Act.

THE CONSUMER’S RIGHT TO FAIR LENDING

There is a sufficient number of statutes – both federal and state – that ensure that every home buyer is protected when looking for mortgage loans. These laws are against those pertaining to mortgage loans on the basis of race, national origin, religion, gender, marital status, age, receipt of public assistance funds, familial status, handicapped, and so on. Under US laws, the lenders and credit institutions are prohibited from taking any of the abovementioned factors into account in dealing with debtors and borrowers.

THE CONSUMER’S RIGHT TO FAIR LENDING: EXAMPLES

To illustrate a case of right to fair lending, creditors must not in any way discourage their clients of race from availing mortgage loans. The same credit terms should be offered as other applicants with similar loan requirements. Also, treating an application differently on account of sex or marital status is prohibited on the same grounds as above. Creditors and lending institutions must accommodate anyone equally. Getting turned down for failure of meeting the credit lending institution’s standard is all right, but it is not if such standards are based on discrimination.

THE CONSUMER’S RIGHT TO FAIR LENDING: Concerned Organizations

If you encounter problems in your mortgage loans or credit transactions on the basis of discrimination, there are several organizations, both private and public, that can help you. Private fair housing groups, for instance, can extend assistance throughout your mortgage process. These groups are useful in understanding whether there is an unlawful discrimination committed in your mortgage loan. Human rights agencies as well as federal and state agencies are available also to help you especially in the area of enforcing statutes with regards to discrimination.

CONSIDERING REFINANCING? THEN READ ON…

Taking a mortgage is not the end in financing. With the fluctuation markets, interest rates keep changing, whether it is hiked or dipped. So, you have the option of refinancing when the opportunity is available. With refinancing you can save a lot of money as the interest gets lower and you save on lower payments monthly.

To make up your mind whether you should refinance or not:

Changing from adjustable loan to a fixed rate:

• By having a fixed loan means that your payments will remain the same as you refinance on a low interest. Converting  ARMs to a fixed rate makes sense as fixed rate is more stable.

Fix your stay:

• How long you plan to stay in the same house reflects on the kind of refinance you should opt for. As you refinance even on a lower interest, you have to keep in mind that closing costs and fees would remain the same. If you plan to stay long   term in the house, then only it makes sense to refinance as the time needed to come at par will be longer.

Compare and fix:

• Before going in for a refinance, you should do your homework effectively. Read about the rates prevailing in the market, different deals of various lenders. Knowledge about all these will help you to get the best rates at lowest interest.

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