Know Your Home Buyer Rights

When you’re buying a home, there are a few things that will act as determining factors- namely your credit history and your income. Your age, gender, and race, should not play a role.

There are many laws in place to protect buyers against discrimination, but you should still be aware of your rights as a buyer, especially if you believe they’re being ignored.

The Equal Credit Opportunity Act

The Equal Credit Opportunity Act was enacted in 1974, making it unlawful for any creditor to discriminate against applicants because of their race, religion, sex, marital status, or age. The act ensures that only factors that actually matter, like your income, assets, employment history, and credit score, are taken into account for a loan.

Why do they ask this Information if it isn’t a Factor?

You may be wondering why mortgage applications have a section that asks for your gender, race, and ethnicity if these factors are irrelevant.

This information is needed in order to protect the buyers. The federal government collects this information under the Home Mortgage Disclosure Act, in order to ensure that lenders aren’t discriminating against buyers. For example, the government will notice if lenders are approving only applications from a specific demographic, and can then take action.

Marital Status and Gender

Creditors are allowed to ask if you are married, single, or separated, however they are unable to ask if you are widowed or divorced. While they are not allowed to use your marital status as a determining factor, keep in mind that if you and your spouse apply for a loan, both incomes and credit ratings will be taken into account.

Creditors are also unable to offer you different loan programs, particularly those with higher interest rates, because of your marital status, gender, or sexual orientation.

Child Support and Alimony

Creditors are required to give you the option to include alimony or child support into your considered income. If you need to include these in order for your income to qualify for the loan, you will need to disclose them. Otherwise, you’re not required to tell them.

Creditors are also allowed to ask if you’re required to pay alimony or child support, but unable to ask if you plan to have children in the future.

Age and Public Assistance Benefits

If you’re over the age of 62, age can only be a factor when it’s in your favor. Lenders are unable to penalize you with higher interest rates due to your age, but are allowed to offer you better deals because of it. Though if you’re near retirement, lenders are allowed to take this into consideration, as it will affect your income and credit standing.

If you receive public assistance, creditors cannot discourage you from applying for a loan. By law, creditors are required to view income from steady public assistance just as they would from other sources.

If you feel that your rights have been infringed by a lender, there are a number of different ways you can take action. You can contact your local Attorney General’s office, and report the lender to relevant offices like the Federal Trade Commission.

Now that you’re aware of your rights, you can move forward on your mortgage application with confidence.

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