A new survey by the government shows that many minorities have paid more for mortgages than whites have. Government representatives and civil rights groups are blaming racist practices and calling for mortgage lending reform. The government data show that one minority group, namely Asian-Americans, get better mortgage deals than whites. They typically have better credit scores than any other group of Americans today. Your credit is the main factor a mortgage lender will use to set your interest rate.
Forgotten in the civil rights outrage over the government lending report that mortgage lenders use predatory lending practices with minorities, is the fact that almost have of Americans today have lousy credit. These individuals represent the largest risk for banks and other lenders. A measure of wealth seems to have little bearing as to whether or not they will be late on payments or default on a loan. Asian-Americans tend to have better credit ratings and as a result get better deals on their loans. This is not racism, it is safe business practices. If you are a person with poor credit you will not get a good deal on a loan. If you have a credit score over 700 you probably will qualify for a better rate on your mortgage loan regardless of your skin color: white, green, or purple.
If you are currently one of the many Americans with a poor credit today, there may be other ways to get a better deal on your loan by being a smart shopper. To learn more about shopping for the best mortgage loan, sign up for our free eZine: “Five Things You Need to Know.”
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
