Which of the following practices is permitted under Rhode Island mortgage laws?

Financing a home with a tangible net benefit to the borrower is permitted under Rhode Island mortgage laws because it aligns with the principles of responsible lending. This practice ensures that lenders consider the borrower's ability to benefit meaningfully from the mortgage, such as through improved loan terms, lower interest rates, or access to a more suitable financial product. Such regulations are designed to protect consumers from predatory lending practices and ensure that borrowers are not placed in worse financial positions through refinancing or loan agreements.

The other practices mentioned are typically considered harmful or predatory. Loan flipping, for instance, refers to the practice of persuading borrowers to refinance repeatedly, often with little benefit to them, leading to unnecessary fees and potentially greater debt. Charging excessive fees for loan refinancing can burden borrowers, making it difficult for them to manage their finances effectively. Denying loans based on age could be considered discriminatory and against fair lending practices, as it does not take into account the individual borrower's financial situation or creditworthiness. Thus, providing financing that includes a tangible net benefit serves to safeguard borrowers and promote fair, equitable lending.