In a world where there should be less discrimination, the LGBTQ community has always believed that they face more. Indeed, credit rating agency Experian confirmed as much in their LGBTQ Experian Finances Survey last year which found that almost two-thirds of people surveyed from the community had suffered financial hurdles related to their orientation.
In this article, we look at the financial hurdles that people in the community often face.
The situation was unclear, but a study released recently from Iowa State University suggests there’s a significant difference in successful mortgage applications to purchase a home depending on your orientation.
The Iowa study found that same-sex couples who applied for a mortgage were 73% at greater risk of getting denied than other couples. That was not all. They also found that interest rates charged to same-sex couples for a mortgage ran higher between 0.02 up to 0.2 percent which doesn’t sound like much until you remember that these are substantial home loans over 15 to 30 years’ duration. It adds up!
As the NBC reported, the Proceedings of the National Academy of Sciences which published the study also discovered that same-sex couples historically have not defaulted on lending any more than heterosexual couples. The disparity with the internet rates doesn’t make sense, however, the rate of mortgage application denials is what’s most alarming.
While the country is slowly becoming more open to the differences within the LGBTQ community due to greater celebrity exposure, better education on the subject, and people understanding that there is nothing to fear, that’s not universally true.
In a world where loans can be refused without necessarily giving a reason, it’s difficult to determine the true cause for a loan denial. While the Equal Credit Opportunity Act protects against various kinds of discrimination in the States when accessing credit, it doesn’t provide protection against your orientation being used against you.
Even business founders from within the community suffer from poor access to lending. Solutions like business crowdfunding are likely to be more open to lending to companies regardless of the sexual orientation of the founder. Indeed, it also gives the LGBTQ community the opportunity to get behind issues and founders they wish to support more fully.
Networking within the community is a good idea to work on breaking down more barriers. Restrictive lending policies are not acceptable and the LGBTQ community as a whole needs to rise up against them. On the personal front, when you have a good plan for how to use the money, then applying for loans with bad credit through LoanPig where you won’t be judged is another approach. This can be useful in certain circumstances as a structured loan; timely repayment will look good on a credit report too.
For people within the community, changing minds and having greater access to fair lending is not something that will happen overnight. But as more attention is brought to these important issues, it helps to highlight the ongoing disparity and unfairness.