It's Pride Month. Here Are 6 Home Buying Tips for LGBTQIA+ Buyers

It's a difficult time to buy a home, between higher mortgage rates (currently, the average 30-year fixed-rate mortgage rate is 6.57%, per Freddie Mac) and fewer home listings to choose from. And if you're a member of the LGBTQIA+ community, the challenges you face as a buyer could be even greater.

Statistics about LGBTQIA+ Americans' financial health gathered and interpreted by The Ascent show that queer Americans face higher rates of poverty, and roughly 60% of queer men and women own homes compared to about 70% of straight men and women. And a study of mortgage loan data conducted by researchers at Iowa State University found that same-sex couples were 73% more likely to be rejected for a mortgage loan application than different-sex couples.

None of this is good news, but there are ways to make homeownership possible for you, even if you don't fit the more traditional mold of American home buyers. Focus on making the following moves to give yourself the best possible chance to buy your dream house.

1. Work on your credit

Getting a mortgage and buying a home begins with getting your finances in order, and the best place to start is with a closer look at your credit profile. After all, mortgage lenders will be focusing on this when deciding whether to approve your application, so why not beat them to the punch?

You can access your credit reports (you'll have three, one from each of the major credit bureaus) for free every week for the rest of the year. Go through the reports and look for errors. If you find account data that isn't yours or closed accounts that should've fallen off your report by now, you can request that these bits be removed by the credit bureaus, which should boost your credit score.

2. Pay down debt

Another way to both improve your credit score and become a strong mortgage borrower is to pay down your existing debt. Lenders will consider your debt-to-income ratio when deciding whether to approve your home loan application because it's in their best interest to ensure you can pay back the money you borrow. And for your own peace of mind (and credit score), it's best to approach homeownership with a solid handle on your expenses.

Remember, the costs of homeownership don't end with your mortgage loan (and the expenses that are often rolled into it, like property taxes and homeowners insurance). They also include less-predictable expenses like maintenance and home repairs. Not having to pay as much toward other debts will make it easier to save money for these items so you can avoid future debt.

3. Save, save, save

Speaking of saving money, you'll generally be required to make a down payment when you buy a home. Depending on the type of mortgage you opt for, you might not need to put down very much -- for example, FHA loans only require a 3.5% down payment when the borrower has a credit score of at least 580. But making a higher down payment will work in your favor, and if you can put down at least 20%, you'll avoid having to pay for mortgage insurance, saving you money on your mortgage payments every month.

It's a good idea to have some additional savings in reserve. This way, a lender can see that if you lose your job or suffer some other financial setback, you can still make mortgage payments until you get back on your feet. So don't forget to consider this when thinking about your costs to buy a house.

4. Get pre-approved

After your finances are shored up, shop around for mortgage lenders and secure a mortgage pre-approval. This process involves lenders looking at your finances and deciding how much money you're qualified to borrow for a home. A pre-approval letter is a way to show home sellers and their agents you're a qualified borrower and aren't just wasting their time.

When picking the right mortgage lender, it's best to get as much information on your options as you can. You might choose to work with a big national lender, an online-only lender, or even your hometown credit union. Ask queer friends, family members, and community advocates for recommendations to mitigate the chances you'll be discriminated against. And if you speak to a mortgage loan officer along the way and something feels off, buy with a different lender instead.

5. Target areas where you can feel at home

If you're not already focusing on a particular location, do some research to find the right spot where you can be comfortable and live your truth. It's a sad fact that many areas with the most robust legal protections for LGBTQIA+ Americans often boast some of the highest real estate prices. In 2020, Zillow found that the cost to buy a home in such areas was 63% more than in places with few or no legal protections.

My own personal tip for this is to find less costly towns and cities in states with more robust anti-discrimination laws in place. For example, you may not be able to afford to buy in New York City, but New York State is home to other lovely (and less expensive) cities.

6. Find a real estate agent you trust

A real estate agent is your best friend and advocate when it comes to finding the right house, so approach finding one strategically when you're ready to look for homes. Again, talk to members of your community and get the names of agents who are allies and put their clients first. Another great resource is the LGBTQ+ Real Estate Alliance. This organization offers a real estate agent search tool to find queer-friendly professionals to help you buy.

Every American hoping to buy a home in the near future is facing an uphill climb, and if you're part of the LGBTQIA+ rainbow, yours is likely even steeper. The above tips can help you get in the right financial shape and find the right crew to help you purchase a home and achieve your own part of the American dream.