Study the Past Home Loans from other Mortgage Companies before Settling on Yours
Tim WorstallLoanBiz Columnist
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information will be a little out of date by the time you can see it (it will be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.
