Even as gradually rising interest reduces the pool of well-qualified refi candidates [1], 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 [2] 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.