February 17th, 2020 12:49 PM by Jackie A. Graves, President
Low mortgage rates
continue to push borrowing costs lower this year, but not every consumer is
able to qualify. About a quarter of mortgage refinance applications are getting
denied, according to a study from LendingTree of more than 10 million mortgage
The top four reasons
why applications were denied were debt-to-income ratio, credit
history, incomplete application, and insufficient collateral.
continue to be a harbinger for mortgage applicants. Those ratios accounted for
26% of mortgage denials and proved to be the biggest barrier for borrowers
living in pricey cities. Applicants in San Jose, Calif.; Honolulu; Bridgeport,
Conn.; San Francisco; and New York City saw refinance applications denied the
most for this reason.
contributed to 24% of denials, according to LendingTree’s study. The highest
share of applicants who failed to get approval due to credit history were in
Winston-Salem, N.C.; Louisville, Ky.; McAllen, Texas; and Birmingham, Ala. The
cities all have household incomes that are below the national median of
that the following metros have the lowest mortgage approval rates:
El Paso, Texas
New Haven, Conn.
Virginia Beach, Va.
For those trying to
better their chances of a mortgage approval, lenders recommend examining their
credit history and disputing any errors before applying, and paying attention
to their debt-to-income ratio. “Don’t take out a new loan that stretches your
ability to repay,” LendingTree states. “Pay down debt prior to applying for a
loan, and limit spending.”
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