Getting a mortgage can be an exhausting process. Lenders might dig into just about every aspect of your financial life, from your credit score to the amount of money you've got in your bank account. The whole thing can leave you feeling a bit exposed but fortunately, certain information is off-limits. Federal law outlines what lenders can and can't ask.
As you shop around for a mortgage, be aware that a lender who poses any of the following questions is crossing the line.
1. Are you pregnant or planning a family?
If you're hoping to start a family or have another child, your mortgage lender doesn't have the right to know that information. If they find out you're expecting, they can't ask you whether you or your spouse plans to stop working once your baby is born. The Equal Credit Opportunity Act protects lenders from using that information against you as part of the mortgage approval process.
When it comes to kids, lenders can only ask potential borrowers about the information that's reported on their income tax returns. Legally, lenders are bound to assume that even if a borrower or their co-borrower is pregnant, that won't affect their future employment or financial income.
2. Are you single, divorced or widowed?
Lenders have to be careful when talking to a potential borrower about their marital status. They can't ask you whether you're single, divorced or widowed. Instead, they can only ask if you're married, unmarried or separated.
If you're separated or divorced, you're going to have to provide some extra paperwork to the lender. They're probably going to want to see a copy of your separation agreement if you have one or your divorce decree. And if you're paying out alimony or child support, that'll affect your debt-to-income ratio.
3. Are you sick or disabled?
The Fair Housing Act and the Americans with Disabilities Act prohibit discrimination based on illness or disability. If a lender tries to feel you out to see if you're suffering from any serious health problems or questions you point-blank about a disability, that's a violation of your legal protections.
Your age is another factor mortgage lenders can't use against you. Someone who's old and bedridden can get a mortgage loan if he or she has the credit score needed to qualify and meets the lender's other criteria.
What to do when your lender treats you unfairly
If you believe that you're a victim of mortgage discrimination, you can contact your state attorney general's office. You also have the option of filing a complaint with the Consumer Financial Protection Bureau (CFPB) or the U.S. Department of Housing and Urban Development (HUD).
If all else fails, you can always sue your lender in federal court for punitive damages.