Nobody likes to get a left swipe from the bank when applying for a home mortgage loan, BUT unfortunately, nearly 1 in 10 people get denied!
TOP REASONS
- Poor credit history
- Credit score
- Too high a debt-to-income ratio
- Too low an appraisal,
- Incomplete application.
So, credit history and debt-to-income ratios are the chief barriers to denial, making up 26% each of denied loans. Borrowers living in California feel this the most. 3 California cities—Los Angeles, San Francisco, and San Jose had the highest share of borrowers who were denied a mortgage because of their debt-to-income ratio…not shocking. On the other hand, credit histories are causing a bigger problem in places like Louisville, KY; Memphis, TENN.; and Philadelphia.
“The current housing market is particularly competitive,” says Tendayi Kapfidze, LendingTree’s chief mortgage economist. “The key for home buyers is being well-educated on the homebuying process, enabling them to be well-prepared when they enter the market. Understanding the key reasons mortgages are denied can help borrowers avoid missteps and compete effectively to secure their dream home.”
Some cities are doing just fine with denial rates as low as 5%, while others saw denial rates at more than double that rate. For some reason, borrowers in Birmingham, ALA are the most likely in the nation to be denied a mortgage. Yikes!