Mortgage AI Tries to Break Language Barrier, Bridge Homeownership Gap

Help for Spanish-speaking home buyers

As artificial intelligence becomes a larger part of day-to-day life, it’s trickled into and modernized the mortgage process.

That process of applying for a loan — loaded with esoteric, industry-specific terms — can be very restrictive to non-English speakers.

One mortgage technology company integrated their AI with Fannie Mae- and Freddie Mac-backed loans to help turn Spanish-speaking house hunters into homeowners.

Mortgage AI making waves

The rate of Hispanic homeownership reached 48.8% in the fourth quarter of 2024, according to the Census Bureau. That compares to compares to rates of 46.4% for Black Americans, 62.7% for Asians, and 74.4% for whites.

Racist practices and policies, such as redlining, caused these wide demographical gaps in homeownership. The lack of language inclusivity also furthers this divide.

Only 17% of Hispanic mortgage applicants received translation services from their lender, according to a 2023 report by Maxwell. Overall, 23% of Hispanic borrowers said they ran into language barriers when applying for a mortgage. Of that group, 51% took on the costs of hiring a professional interpreter.

“Spanish-speaking immigrants have more than $1.7 trillion in buying power, yet continue to be underserved and underrepresented because vital documents such as prerequisite explanations, loan applications, appraisal documents and closing contracts are rarely presented in Spanish,” said Diane Yu, co-founder and CEO of TidalWave. “Language barriers create difficulty understanding critical loan information, make it challenging for Hispanic borrowers to comprehend important details about loan terms, projected monthly payments, and closing costs.”

Buying a home is already the most significant and expensive financial decision the majority of people make in their lifetime. Any additional costs deter many would-be borrowers from affording property and creating personal wealth. As of January 2024, only five of the 10 largest mortgage lenders by volume fully translate their websites into Spanish, according to the Urban Institute.

That same study revealed limited English proficiency (LEP) households had a 39.4% homeownership rate in 2021, compared to 56.2% of English proficient households (who speak another language at home) and 67.2% of households with English as their dominant language. The study estimated removing the language barrier could increase LEP homeownership by about 294,000 people. Overall, Hispanic mortgage applicants faced a 16.6% denial rate in 2022 compared to 10.9% of white applicants.

TidalWave is addressing this issue with its Spanish-speaking AI integration for mortgage lenders named SOLO. The product not only translates text, but interacts with borrowers in real time, providing education and guidance throughout the mortgage application, as well as pulling their required financial information.

“What you want to see is not just a translation of a website. It’s actually having the Spanish native language conversation with the borrower as they’re applying,” Yu said. “They can ask their question in Spanish and can get their answers back in their native language, so that you don’t have to worry about talking to a translator or identifying a Spanish-speaking loan officer.”

Overall, artificial intelligence gains more traction in the homeownership process, as about a third of prospective borrowers use AI tools when buying a house, according to Veterans United Home Loans.

The bottom line for home buyers

No matter your language, the mortgage process can be difficult to navigate.

If you’re in the market to buy a home, you should get your ducks in a row, learn how to negotiate your interest rate down, and see if you qualify for financial aid.

Talk to a local mortgage professional if you’re ready to begin your path to homeownership.