April 17, 2021

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Mortgage News

5 States Where Female Mortgage Borrowers Get The Worst Deals

According to a new analysis of the federal data, women are getting raw mortgage deals in almost every corner of the country. Compared to single male borrowers, single female borrowers pay higher interest rates that add thousands of dollars in additional costs.

This is the result of studies by the mortgage start-up Own Up, in which the data of the Home Mortgage Disclosure Act were used for comparison Mortgage rates paid by single women to those paid by single men applying for credit. Women paid more in every state except Alaska.

Research points to another area where a gender gap economically disadvantages women. The Pay gap It has been widely reported along with the fact that women pay more for cars than men.

Despite decades of regulatory efforts to eliminate discrimination in the housing industry,pink tax“This also applies to mortgages,” says Patrick Boyaggi, CEO and founder of Own Up. “If it’s not entirely fair that men get the same rates as women, then it is not right and it has to change.”

Where women get the worst deals

Many mortgages are given to married couples, but Own Up checked the interest rates that were only paid by individual borrowers. Based on a $ 345,000 mortgage loan, women would pay the most here:

  1. Mississippi. The typical borrower in the state pays 3.47 percent on average, versus 3.37 percent for men, a 10 basis point gap that equates to $ 7,077 over 30 years.
  2. Alabama. Women pay an average of 3.44 percent versus 3.36 percent for men, for a total of $ 6,006 over 30 years.
  3. Ohio. Female borrowers typically pay 3.42 percent versus 3.34 percent for men, for a total of $ 5,856 over a 30-year period.
  4. Florida. Women pay an average of 3.46 percent versus 3.38 percent for men, for a total of $ 5,591 over 30 years.
  5. New Jersey. Women pay an average of 3.26 percent versus 3.18 percent for men, for a total of $ 5,515 over 30 years.

Where women get the best deals

And this is where women pay the least additional interest costs:

  1. Alaska. The typical borrower in the state pays 3.21 percent on average, versus 3.23 percent for men, a 2 basis point gap that equates to $ 1,656 over 30 years.
  2. Maine. Women pay an average of 3.37 percent versus 3.36 percent for men, for a total of $ 564 over 30 years.
  3. Wyoming. Female borrowers typically pay 3.29 percent versus 3.28 percent for men, for a total of $ 701 over a 30-year period.
  4. Montana. Women pay an average of 3.31 percent versus 3.3 percent for men, for a total of $ 702 over 30 years.
  5. Oregon. Women pay an average of 3.33 percent versus 3.31 percent for men, for a total of $ 1,124 over 30 years.

The importance of shopping

An earlier one Study by the Urban Institute also found that women pay 7 basis points more than men for mortgages. That study found a more modest premium for women – only about $ 150.

“Only female borrowers pay more for their mortgages, both because they generally have weaker credit characteristics and because a higher percentage of those mortgages were subprime,” reported the Urban Institute.

Boyaggi came to a different conclusion. While credit scores are an important factor in determining your mortgage rate, Boyaggi found no evidence that female borrowers were at a disadvantage on this front.

“You just don’t see that female borrowers have significantly different credit scores than males,” says Boyaggi.

Many female borrowers neglect to find the best deal, says Boyaggi, an oversight that can result in thousands of dollars in additional costs over the life of a loan.

In addition to at least three offers – and ideally five mortgage offers – borrowers should actively negotiate a lower interest rate or lower closing costs, Boyaggi says.

“Consumers should not only buy a mortgage, they should also negotiate on better terms,” ​​says Boyaggi.

What you can do

How to get the best mortgage offer:

  • Shopping spree. Closing costs and rates vary depending on the lender. So get three commandments – and more if you can.
  • Negotiate. Even when you find the best deal, ask for more – a better price or concessions on closing costs.
  • Understand the breakeven point. At this point, the savings in monthly payments will offset the amount of the closing costs. This Refinancing Calculator can help you decide.
  • Don’t chase the lowest rate. Yes, a low rate and scant payment are good, but make sure that closing costs don’t overwhelm these benefits.

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