There are probably some parts of your life that you'd prefer to keep private. But if you're getting a new home or refinancing your mortgage, you may not be able to--mortgage lenders are nosy. Before they hand over hundreds of thousands of dollars, they want to know as much about you as possible. Here are some surprising things they're allowed to ask you--and some they're not.

Getting Personal: Three Nosy Questions Mortgage Lenders Can Ask, and Two They Can't

Questions Mortgage Lenders Can Ask

1. Are You Involved in a Lawsuit?

This question is part of the application for every new home loan or mortgage refinance. Lenders ask this because it's important to know if an expensive judgment could ruin your finances or those of your business. If you're involved in a lawsuit, put together a good explanation or get a statement from your lawyer detailing the facts of your case and why it won't damage you financially. If you are the plaintiff, not the defendant, you should be okay. If you are the defendant, prove that you have insurance to cover the liability.

2. Your Divorce: What's Going On?

Because divorce is a major cause of bankruptcy, it's understandable that your mortgage lender wants the facts about yours. But not the tabloid stuff, just the financial stuff. Who got custody of the house? Who pays child support or alimony? Are the required payments being made on time? It may seem unfair, but if your ex is a deadbeat, you will be assigned "contingent liability" for your joint debts. This could curtail or even derail your mortgage borrowing.

The reason for this is that a judge's order can't make only one spouse responsible for debt incurred by both parties. So if your ex blows off an obligation, the creditor can and will come after you. In many cases, mortgage lenders won't approve a new home loan to divorced spouses until each has established an independent on-time payment history. Fannie Mae's guidelines state, "The lender is required to evaluate the payment history for the assigned debt after the effective date of the assignment. The lender cannot disregard the borrower's payment history for the debt before its assignment." And if you have separated, but not divorced, you need a legal separation agreement before you can buy a new home or refinance your current mortgage.

3. The Race Question--Yes, They Can Ask!

This is also part of the standard mortgage application. Lenders aren't asking this so they can work you over--if they don't ask, they're breaking the law. If you don't answer, the loan officer has to make a guess about your ethnicity and fill it in anyway--he or she must do this in order to comply with the Home Mortgage Disclosure Act (HMDA). The Department of Housing and Urban Development (HUD) uses this data to look for mortgage lenders who show patterns of discrimination--for example, charging higher fees to minorities or declining their loan applications at a higher rate than they do for other groups.

Get a Lawyer if You're Asked Any of These

1. Planning to Have Children?

In the bad old days, bankers routinely asked women applicants this intrusive question, assuming that mothers would quit their jobs and experience a decrease in income. That question is a big no-no under the Equal Credit Opportunity Act. And underwriters can't treat income differently because of your gender or marital status. For example, they can no longer count a man's earnings at 100% but a woman's at 75%. And they can't underwrite on the assumption that a female applicant will quit working to raise children.

2. How Is Your Health?

Mortgage lenders aren't allowed to discriminate against people who are ill or older applicants, even if they are 80 and taking out a 30-year loan. Unless you're applying for a reverse mortgage, your age is not relevant. And the Fair Housing Act and Americans with Disabilities Act (ADA) preclude lenders from treating you differently because of health issues. They also can't discriminate because of your sex, age, marital status, race, color, national origin, public assistance status, or if you filed any complaint under consumer protection laws. They cannot use their advertising or other documents to send a message that would discourage a qualified person from applying for a loan.

In most cases, lenders won't ask you about anything that they aren't entitled to. But if they do, tell them to MYOB and get your home loan elsewhere.