Owning your own home can be a valuable long-term investment and wealth-building opportunity for future generations, but getting your foot in the door and actually buying that first home can be tricky.
That’s especially true for certain communities.
“Black and Hispanic customers actually get denied home loans almost twice as much as white customers,” Investigative Reporter with Consumer Reports, Lisa Gill said.
If your loan application gets denied, Consumer Reports says there are things you can do to help save it. You’ll have to act quickly, though.
“If you want to save your loan, you’ll have as little as a day or two between the time your loan officer breaks the bad news to you and the bank sends a formal letter of denial,” Gill said.
CR says to start by asking for a detailed explanation of why you were denied, which you are entitled to get by law.
If you were denied because some information was missing or unverifiable, get it as soon as possible.
“By providing a letter explaining anything the lender may not be clear about, such as reasons for gaps in employment along with supporting documentation, could salvage your loan application,” Gill said.
If you find you’re hitting dead ends, hopping around for a new mortgage might be your best bet, but do it right away.
Every time your credit score gets “hard checked,” it can cost your score several points.
“You’ll have 14 days from the first day the original lender did a “hard check” to shop around for a new mortgage without further hurting your credit score,” Gill said.
If you are looking for a new loan, a lender that participates in a “special purpose credit program” might help.
This program allows the lender to assist disadvantaged borrowers of color, specifically women, people with disabilities, and other underserved groups.
You can find a bank offering an SPCP near you by visiting the National Fair Housing Alliance’s website at https://nationalfairhousing.org/