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LendingTree Reveals the Cities With the Highest Rates of Denied Mortgage Applications


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2018 May 18, 8:26am   969 views  1 comment

by Patrick   ➕follow (55)   💰tip   ignore  

https://www.lendingtree.com/home/mortgage/cities-with-highest-rates-of-denied-mortgage-applications/

Key findings:

Nearly one in 10 borrowers get denied for mortgages. On a national level, 8% of loan applications were denied.

Credit history and debt are the biggest barriers. The leading reasons for denial were credit history (which includes credit score) and debt-to-income ratio, which were each responsible for 26% of denied loans. These were followed by collateral at 17% and incomplete applications at 14%. All other reasons for denial were cited in less than 10% of denied mortgage applications.

Debt is a huge barrier to borrowers living in California. We found three California cities (Los Angeles, San Francisco, San Jose) had the highest share of borrowers who were denied because of their debt-to-income ratio.

Credit history is holding borrowers back in Louisville, Ky., Memphis, Tenn. and Philadelphia. Among failed applications in these three metros, we found the highest rates of denied borrowers due to their credit history.

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1   SunnyvaleCA   2018 May 18, 10:46am  

In order to be denied a mortgage application, you need to apply for a mortgage. So, I think high denial rate is just an indication of a high ratio of people who are unaware of the poor quality of their own financial situation or unaware of the mortgage process in general. If you or I looked at the financial situation of the denied people before they actually applied, we would probably advise them that they shouldn't be buying a house because their finances aren't yet in order.

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