Just because one lender says you "need" a subprime loan to get a home (or to refinance the one you own) doesn't mean you really do. Some experts say that as many as one third of people who wind up paying the higher interest rates and other costs for subprime loans could have gotten a regular loan at a lower rate if they had done some basic comparison shopping.

Anyone who has ever spent time hunting for a mortgage knows that the interest rate a lender lists in its advertisements is not always the interest rate you get. Even people with a good credit rating may wind up with a higher rate based on any number of factors ranging from the type of mortgage they want to the size of their down payment. Others-those with a "blemished" credit history or no credit history at all-often get a "subprime" rate, which is a rate higher than those with a good credit rating would get.

But not everyone who gets a subprime rate deserves it, explains Sharon Reuss, senior communications associate for the Center for Responsible Lending (CRL), a non-profit research and policy organization in Durham, N.C. The CRL's main focus is predatory lending, but it pays special attention to subprime lending because at times the two overlap. However, while predatory loans may be difficult to define, subprime ones are not, especially when they happen to large groups of people.

According to a 2002 study, "Upper-income African Americans in predominantly African-American neighborhoods were three times more likely to have subprime loans than low-income white borrowers," Reuss explains. "Latinos and African-Americans were 2.5 and 4.1 times, respectively, more likely than Caucasians to receive a refinance loan from a subprime lender. And borrowers aged 65 and older have five times the odds of receiving a subprime loan than borrowers younger than 35."

She realizes that some borrowers do have to pay more for a loan. "Subprime lending makes credit available to people who historically have been unable to get it. They have blemished credit or no credit at all. We think it is very important to provide credit opportunities to them. Our concern is when the terms become abusive. The point that I really would like to make is that while the majority of predatory loans occur in the subprime market, not all subprime loans are predatory." Some people need to pay a higher rate because they are greater risks. However, many who pay that higher rate, shouldn't. "Both Freddie Mac and Fannie Mae estimate that one-third of subprime borrowers could quality for better terms."

Other consumer-protection groups agree. "The good news is that access to credit is more available in the home mortgage market, but the bad news is that it is being offered in a disproportionately unfair way," says John Taylor, president of the National Community Reinvestment Coalition, another non-profit watchdog organization.

The subprime mortgage market "is the fastest growing segment of consumer finance," according to Reuss. "Between 1994 and 2004 the subprime mortgage market grew more than 90 percent, from $35 billion to $530 billion." Much of that growth came through aggressive marketing to people refinancing their homes.

Anyone who owns a home is bombarded with offers to refinance. Many junk-mail offers come with replica checks made out to the homeowner, and all they have to do is refinance their home to get the real check and mortgage -- often subprime -- that goes with it.

Many people who fall into the subprime trap have accepted one of these offers without first checking to see what other lenders can do for them. It is like an impulse purchase that is hard to stop once they start it.

If you are tempted by one of these offers, shop around first for the lowest total cost loan you can get. Besides looking at the interest rate, look at loan initiation fees, processing charges, and prepayment penalties. Lenders must give you a Good Faith Estimate of all the costs and fees for the loan. Get it, study it, and then compare it to the Good Faith Estimates from at least two other lenders.

"Some people are not very sophisticated," Reuss adds. "They may be too trusting of someone who is unscrupulous. There is a whole heap of push marketing that goes on in the subprime industry. Unscrupulous folks have gotten so well schooled in this, that they will often target entire neighborhoods of seniors, or minority communities."

Many lenders, however, will argue that the odds of foreclosure or of late payments are higher in minority communities. If a neighborhood has a crime problem, home prices can even fall, they say. All of this means higher risks, and lenders say they have every right to demand a higher interest payment from a risky borrower. They do.

But are you really a "risky" borrower? "One way to find out is to take a look at your own credit history," Reuss suggests. "It is easy enough to get." Not only can you find out if you are "subprime," but you can also make sure there are no mistakes on your credit history that would make you appear to be a subprime candidate. If there actually are legitimate black marks on your credit record, you can work on getting them cleaned up to get yourself out of the subprime category.