Study the Past Home Loans from other Mortgage Companies before Settling on Yours

Tim Worstall
LoanBiz Columnist

Article Rating , 4 out of 5 based on 1 votes

Mortgage companies must disclose information about past home loans according to the Home Mortgage Disclosure Act. You should use this information to find the right lender. Consider the types of loans they typically finance and the amounts. Then narrow your choices to the mortgage companies that offer the largest number of loans similar to what you are looking for.

The Home Mortgage Disclosure Act provides you with home loan information.

The various mortgage companies have to compile statistics about their home loans under the Home Mortgage Disclosure Act. While this information will be a little out of date by the time you can see it (it will be last year's figures) looking at these numbers can tell you a great deal about what is going on in the lending market. You can find out who is lending in which areas, how committed one of the mortgage companies is to lending to minorities, or specific regions, the lender's APR versus the rate on Treasury securities--some pretty useful information.

Why do the mortgage companies report on their home loans this way?

The simple answer is of course that the law, the Home Mortgage Disclosure Act, insists that they do. The primary purpose is to allow the public to monitor the activities of the mortgage companies. Many of the details of their home loans will be there, the racial characteristics of those they loaned to, their income levels, the age of housing and location. Using this information, it's possible to determine if the mortgage companies are red-lining certain areas or breaching their responsibilities in not lending to certain racial groups and so on. The advantage to you is that all of this information about home loans, once it has been collated is placed in the public library (now on the Internet as well), so that you can see what is actually happening in the mortgage market, rather than having to rely upon what the real estate agent tells you. As with any financial transaction, knowledge will help you make the best decision on your next home loan.

About the Author
Tim Worstall has a degree in finance and accountancy and writes extensively on matters economic and financial.

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