Marriage Equality Fuels Rise In LGBT Mortgage Applicants & Homeowners
What Is An LGBT Mortgage?
There is, of course, no such thing as an LGBT mortgage. There are mortgages. And there are applicants and borrowers who happen to be lesbian, gay, bisexual and transgender.
Naturally, that won't stop us talking about LGBT mortgages. By that, we'll mean a mortgage owed by an LGBT person.Verify your new rate (Mar 21st, 2018)
LGBT Homeownership (And LGBT Mortgages) On The Rise
And the number of LGBT mortgages is growing.
The 2017 National Association of Gay and Lesbian Real Estate Professionals (NAGLREP) Homeownership Survey suggests that both LGBT married couples and the wider LGBT community have recently become more interested in homeownership.
June 26, 2015 may be the most important date in lesbian, gay and bisexual history. It was when the Supreme Court of the United States (SCOTUS) ruled in Obergefell v. Hodges.
From that date, every American had a Constitutional right under the Fourteenth Amendment to marry someone of the same sex. States were required to license marriages between such couples and to recognize their out-of-state marriages.
Before Marriage Equality
Of course, the landscape wasn't relentless grim for LGBT people before the SCOTUS ruling. Some states had already enacted anti-discrimination legislation and legalized same-sex marriage. And there were plenty of LGBT homeowners from sea to shining sea.
But people were right to fear discrimination. A 2013 study by the U.S. Department of Housing and Urban Development (HUD) found email applications for rental properties from straight couples got significantly more responses than those from gay and lesbian ones.
And, extraordinarily, it discovered "results in states with legislative protections (laws against anti-LGBT discrimination) show slightly more adverse treatment for gay men and lesbians than results in states without protections." Wow.
In addition to worries about discrimination, unmarried LGBT couples also faced practical concerns. In particular, even those who chose the most protective form of homeownership (joint rights of tenancy with survivorship) had more issues than married couples when their partner died.
Meanwhile, they had half the tax exemption entitlement on capital gains on their home than a married couple did.
Both those practical issues have disappeared for LGBT couples who marry. They can now opt for the ultra-protective "tenancy by the entirety." And they enjoy the same capital gains allowance as straight married couples.
LGBT Mortgages From The Government
Since 2012, HUD has had a rule "to ensure that its core programs are open to all eligible individuals and families regardless of sexual orientation, gender identity, or marital status."
In other words, it's not lawful to discriminate against you -- married or not -- if you are applying for or have an LGBT mortgage that the Department backs And those include FHA loans, which require down payments as low as 3.5 percent.
Meanwhile, the United States Department of Agriculture has been promoting its USDA loans (for those buying in rural and some suburban areas) to LGBT homebuyers since before the SCOTUS ruling.
And the Veterans Administration is similarly committed to being inclusive for its VA loans. Both USDA and VA loans can often be had with a zero down payment, providing you qualify.
Private LGBT Mortgages
There is less to stop a private lender discriminating against you if you opt for a mortgage that isn't backed by the federal government.
The Fair Housing Act, which protects people from discrimination on the basis of race, sex, religion and so on does not specifically cover sexual orientation or gender identity.
However, the law is quite widely interpreted. So, if you think you're being discriminated against because you're an LGBT person, call HUD's Office of Fair Housing and Equal Opportunity on (800) 669-9777. You may qualify for help.
Maybe the most persuasive reason for private lenders (and real estate agents, mortgage brokers and home sellers) to avoid discriminating against LGBT people is cold, hard cash.
In 2015, NAGLREP founder Jeff Berger reckoned: "Individuals who identify themselves as LGBT represent an estimated buying power of $840 billion."
In 1988, Gallup asked a representative sample of Americans, "Do you think gay or lesbian relations between consenting adults should or should not be legal?" Most (57 percent) said such relations should be illegal.
When the same question was posed in 2017, nearly three in four (72 percent) said they should be legal.
And it seems inevitable that some of those with anti-LGBT opinions work in real estate, including in the mortgage industry. But there are four reasons that shouldn't put you off buying a home:
- Seriously? Homeownership has historically been one of the most effective ways to accumulate wealth. Don't let anyone stop you from making money.
- Many with vehement anti-LGBT views are older and retired. Statistically, your loan officer, mortgage broker and real estate agent are less likely than average to wish to discriminate.
- Fewer organizations have anti-LGBT policies. If you encounter hostility from an individual, report him or her and demand a friendlier replacement.
- Most people in real estate are educated professionals. Who want to earn a living and don't care who their buyers are as long as they are qualified to close the deal.
This is a challenging time to buy a home in many locations due to the undersupply of houses and the competition for the homes that are available. Only mortgage rates, which remain low, offer a bright spot.
But affordability might not get any better for a very long time. So, if you're serious about buying a home, now could be a good time to act. To start, discover the type of mortgage that would suit you best. Just don't expect to find an LGBT mortgage!
What Are Today's Mortgage Rates?
Today's mortgage rates are very attractive, thanks to a drop last week. Recent economic reports have indicated that inflation is not a concern, and rates fell accordingly.
To find the best mortgage rates available, compare offers from several lenders. That way, you know you're getting a good deal.Verify your new rate (Mar 21st, 2018)
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