Florida stood out in the study for mortgage failures: Almost 1 in 5 mortgage applications (17.1 percent) get turned down, making it the top state in the study for frustrated mortgage applicants. West Virginia ranked second with 15.7 percent of mortgage applicants failing to get a loan.
On the flipside, Minnesota had the lowest rate of mortgage rejection at 7.7 percent, followed by Alaska with 8.2 percent.
Buying a home – and finding the right mortgage – is a journey that can test your grit and resolve. If you haven’t done the proper research and you don’t know what to expect from the process, it can be even more stressful. Your credit history, income, assets and savings will be under scrutiny, and what you don’t know about mortgages can hurt you.
Nationwide, 6 percent of survey respondents said they were denied a loan: 50 percent on their first try and 25 percent more than once:
- 79% were told why their mortgage was denied
- 41% thought the denial unfair
- 33% thought it was embarrassing
- 35% said it pushed them to improve their financial situation
- 52% denied to a high debt-to-income ratio; 39% credit history/score and 25% insufficient income
“Borrowers who don’t understand the mortgage process or don’t know enough about their own credit history tend to hit obstacles or be rejected when applying for mortgages,” says Tim Manni, mortgage expert at NerdWallet. “They also tend to feel regret after their deal is done, even if they succeeded in buying a home. That tells me borrowers aren’t doing enough research – on themselves or the mortgage process – before applying for a home loan.”