Understanding a credit score makes understanding an Olympic gymnastics score seem easy.
For those of us that don’t happen to be accountants help exists. The Federal Trade Commission created several programs for understanding your rights when it comes to applying for homeowner loans.
Applying for loans isn’t adversarial. The mortgage company wants to loan you money and collect that interest. You want a home to build a life (and equity). This is a win-win scenario.
A list of types of homeowner loans shows consumers how easy it is to find a suitable loan program.
This variety helps provide opportunities for future homeowners of different backgrounds and levels of experience. Each type features different advantages and disadvantages.
The Federal Housing Administration loan has the highest debt to income ratio and the lowest down payment. Our firm specializes in making these FHA opportunities possible.
The following explains the Equal Credit Opportunity Act and how it applies to you. We want to make certain future homeowners don’t disqualify themselves.
Equal Credit Opportunity Act Defined
Passed in 1974, the ECOA defends the rights of loan applicants in keeping their personal characteristics from playing a part in a loan decision.
Creditors cannot refuse an applicant for reasons of race, religion, sex, age, marital status, national origin or public assistance. An amendment to the ECOA, the Freedom from Discrimination in Credit Act (FDCA), would ensure gender could not be used as an issue.
Currently, ‘sex’ partially covers this issue, but needs strengthening.
The ECOA prevents loan applicants from being turned away based on perceptions. Only numbers matter when applying for a loan.
Questions related to your background can only be asked under certain circumstances. Here is a short list of the most impactful exceptions.
- Immigration status – These questions may only be considered if your legal status could keep you from remaining in the country for the duration of the loan.
- Marital status – Limited to married, unmarried or separated, not type of partner.
- Community property states – Can ask about marital status on non-joint accounts.
- Spouses – Specific questions of a spouse only when you’re applying jointly, if they’ll have access to the account or if you’re relying on their income.
- Children – Only current dependent expenses, not if you have plans for children.
- Alimony, child support, maintenance payments – Only as part of expenses (if paying) or receiving (if relying on).
- Age – Only if you’re:
- too young to sign
- over 62
- nearing a drop-off income age (near a retirement benchmark)
- questioning the length of employment scores (which is an internal weight from your credit application)
If you suspect discrimination occurring, make your complaint known to the creditor and be aware you can sue in federal district court.
7th Level Mortgage works hard to create opportunities for you in the community. If you are ready to buy or just looking to learn more for the future, then contact us for more information.
Stop dreaming of finding the right homeowner loans. Instead, get started on making your new reality.
7th Level Mortgage is a leading one-stop mortgage providing deeply informed, custom-tailored assistance with every phase of each mortgage transaction. If you are searching for a home loan in New Jersey, Pennsylvania, Delaware, Maryland, New York, or Florida, please contact us today so that we can determine the best Mortgage Lender to place your loan with and get you the best possible rate and program.