Mortgage advice
Keep Out of Lending Trouble

Freddie Mac’s anti-predatory lending Web site offers valuable resources for home buyers.
 

Don’t Borrow Trouble

The hot housing market of the past several years led to many new mortgage products—some of which can hurt a home buyer’s financial health, home equity, and neighborhood stability. The issue has become so critical that Freddie Mac has launched a nationwide campaign to educate the public on risky loans. One byproduct of this campaign is an information-filled Web site that can help you better understand the various loan products. Or, you can visit the Web site to download or print information.
These are some of the site’s highlights:

• What Is Predatory Lending?  Help buyers safeguard themselves against abusive lending practices and find the most favorable mortgage. Consumers also can access resources on Learning More about abusive lending practices and get tips on avoiding borrowing pitfalls.

• CreditSmart. The most effective way to prepare for home ownership is to educate yourself on the importance of using credit wisely. This online tutorial covers nine important topics, including managing money, understanding credit scores, and steering clear of credit traps. The entire CreditSmart Curriculum is available through the Web site for free. A Spanish-language version also is available.

• Prepayment Penalty Mortgages. Prepayment penalties can add up to big trouble for some home owners who think they’re being responsible by paying off a large chunk of their mortgage ahead of the due date. Make sure that you don’t unknowingly enter into such an agreement. This page will help you grasp what a prepayment penalty mortgage is and why you should be careful about this type of loan.

The NATIONAL ASSOCIATION OF REALTORS®