Barbara Rice, a community organizer at the Massachusetts Affordable Housing Alliance, was quoted at saying: “If you’re white they overlook the fact that your credit score is a little too low or you have one extra late payment.”
Whenever a minority cries racism in this country the White majority tends to be somewhat condescending with the “Oh, that’s not racist” plea. But when a White person proves it, things become interesting. Ms. Rice — a white woman — and a black colleague put their theory to the test in an experiment in Massachusetts last year to test the racial bias of mortgage brokers. They both posed as prospective home buyers in separate meetings with several brokers. Rice presented a worse credit rating and lower income than her black colleague to brokers but received a better deal.
Author Ricardo Hazell provides one simple “smell the coffee” bit of advice to anybody, white or minority, who gets offered a great initial rate on a home loan.
Sub-prime rates are cool if you gotta do what ya gotta do. But don't expect 5.5 percent forever. If the Prime Rate, the rate at which the Federal Reserve lends money to banks to lend to common folks, is at (a higher rate) percent and your rate is less than that do you think that's going to last? Do you honestly believe the bank would sign themselves into a deal where they lose money? Especially not for a first time home buyer.