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Unfortunately, discrimination continues to impact millions of Americans. Although progress has been made, and protections against discrimination have been written into law, individuals should still take steps to avoid becoming a victim. 

Prospective homebuyers are no exception. Applying for a mortgage and shopping for lenders present enough challenges without having to worry about being mistreated. Don’t miss out on the loan you deserve—understand your rights and look out for any red flags. 

Lending Discrimination

Laws such as the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) make it illegal for lenders to discriminate based on sex, age, race, religion, color, national origin, physical or mental handicaps, or familial status. Lenders are prevented from denying loans to these protected classes, as well as altering any loan terms. In other words, a borrower cannot be charged a higher interest rate simply because of their age or race. 

However, since a loan’s terms are determined by the borrower’s credit history and financial situation, which varies significantly from person to person, it can be difficult to identify discrimination every time it happens. 

Due Diligence

The first step to protecting against discrimination is to shop around and compare mortgage options. Contact multiple lenders for quotes. While there will undoubtedly be some difference in the quotes you receive, you’ll notice if one is dramatically different from the others. 

You should also take the time to review your credit report before applying for a mortgage. This can help you identify legitimate hurdles to approval, and shed light on whether your interaction is being influenced by other factors. 

Red Flags

Keep an eye out for these signs that a lender might be trying to take advantage of you. If you are treated differently by a lender in person than you were during an initial phone call, or if you are discouraged from applying at all, it may indicate bad faith on the part of the lender. If you are denied, but not given a reason, that should raise also suspicion. In addition, a deal that sounds too good to be true, or that you feel extreme pressure to sign, warrants some hesitation. 

Stay in Control

Most importantly, remember that you control the situation. A commitment as important as a mortgage means you can never ask too many questions. If you have concerns or don’t understand something, address it with the lender immediately. 

If you feel as though you are being illegally discriminated against by a lender, it’s best to cut ties immediately and to notify your local attorney general’s office and the Consumer Financial Protection Bureau.

If you’re in the market for a new mortgage, Open Mortgage has over 15 years of experience in empowering borrowers with an unmatched level of care. Find out more at or by calling us today.

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