Even as gradually rising interest reduces the pool of well-qualified refi candidates, rates remain 30 basis points lower than they were one year ago.
That means a great many homeowners can still save on their monthly mortgage payments by refinancing.
LendingTree recently analyzed data for more than 2.8 million mortgage-refinance applications in the nation’s 50 largest metropolitan areas and found that nearly 83% of mortgage refinances were approved.
For the 17% of applications that were not approved, LendingTree analysts uncovered the following, which they call the top-four reasons for denial:
For 26.5%, a too-high DTI ratio was why the application was denied; a lackluster credit history thwarted 23%; incomplete credit applications were a problem for 18.5%, and insufficient collateral was the main reason that kept 14.9% of denied applications from being approved.
DTI can be an especially difficult-to-overcome barrier in expensive areas including Los Angeles, San Jose, California, and New York, according to LendingTree VP and Chief Economist Tendayi Kapfidze.
y applications are denied for this reason."
Borrowers in areas where home prices are relatively low like Pittsburgh, Detroit, and Buffalo, New York, struggled the most with collateral, he said.
Overall, refi applicants in Salt Lake City; Portland, Oregon; and St. Louis were most likely to find approval.