LGBTQ+ Mortgage Facts: Know Your Rights
TAs a mortgage wealth advisor with over 30 years of experience, I've witnessed significant changes in the housing market, especially regarding the rights and experiences of LGBTQ+ homebuyers. While progress has been made, it's crucial to be aware of the unique challenges and protections in place for LGBTQ+ individuals. Let's explore some key facts and insights to help you navigate the homebuying process with confidence.
The Landscape of LGBTQ+ Home Buying
When it comes to purchasing property, LGBTQ+ homebuyers have been making substantial investments. According to the National Association of Realtors (NAR), LGBTQ+ buyers spent a median of $245,000 on their homes. This figure underscores the commitment and financial investment that LGBTQ+ individuals are making to secure their place in the housing market.
A significant majority of these buyers, around 83%, opted for fixed-rate mortgages, with most choosing conventional loans. This choice reflects a preference for stability and predictability in mortgage payments, aligning with broader trends in home financing.
Discrimination Concerns and Realities
Despite the progress in legal protections, fear of discrimination remains a significant barrier for many LGBTQ+ individuals. The National Association of Gay and Lesbian Real Estate Professionals (NAGLREP) reports that 46% of LGBTQ+ renters are concerned about facing discrimination during the homebuying process, and 13% have experienced it firsthand. These concerns highlight the ongoing need for vigilance and advocacy in ensuring fair treatment for all homebuyers.
Mortgage Approval Challenges
One of the most concerning issues is the disparity in mortgage approval rates. A recent study revealed that same-sex couples were 3% to 8% less likely to be approved for a mortgage compared to heterosexual couples. This data, spanning from 1990 to 2015, points to systemic biases that have historically disadvantaged LGBTQ+ borrowers.
The same study found that even when approved, same-sex couples often faced higher costs. On average, they paid between 0.02% to 0.2% more in interest and fees. These additional costs can accumulate significantly over the life of a mortgage, impacting long-term financial stability.
Homeownership Rates and Legal Protections
The homeownership rate among LGBTQ+ individuals currently stands at 49%, according to NAGLREP. This is notably lower than the national average homeownership rate of 66.7% as of the fourth quarter of 2023. While this gap is concerning, there are legal protections designed to bridge this disparity.
The Fair Housing Act (FHA) prohibits discrimination based on sex, gender identity, and sexual orientation. This was reinforced in 2021 when the federal government expanded the Act to explicitly include protections for LGBTQ+ individuals. The U.S. Department of Housing and Urban Development (HUD) has committed to fully enforcing these protections, ensuring that discrimination in housing and related services is not tolerated.
Credit History and Transgender Individuals
In a positive development, all three major credit bureaus now allow transgender individuals to transfer their credit histories to their new names. This change is crucial in ensuring that transgender homebuyers are not unfairly penalized or disadvantaged during the mortgage approval process due to discrepancies in their credit records.
Moving Forward
While there are undeniable challenges, there are also significant strides being made to support and protect LGBTQ+ homebuyers. Knowing your rights and understanding the landscape can empower you to make informed decisions and advocate for fair treatment in the housing market. If you're facing obstacles or need guidance, don't hesitate to reach out to experienced professionals who can provide support and advice tailored to your unique situation.
In my 30 years in the mortgage industry, I've seen how knowledge and advocacy can transform the homebuying experience. Stay informed, know your rights, and together, we can continue to make progress towards a more equitable housing market for all.
Are you part of the LGBTQ+ community and have questions about financing a home? Give me a call. (412) 606-6701
Prefer to email or text? Click here and scroll to the bottom of the page.
Remember, with Team Jerry Pounds, you can always be yourself. Happy Pride!
