About 8% of mortgage applications were rejected for single-family homes in 2019, according to the latest available data supplied by lenders to the federal government under the Home Mortgage Disclosure Act.
Reasons for the denials:
- High debt-to-income ratio (35%)
- Poor credit history (22%)
- Lack of collateral or LTV (18%)
- Incomplete applications, insufficient cash, unverifiable information and spotty employment history (15%)
Many rejected applicants narrowly missed qualifying for a home loan, while others received less-than-desirable mortgage offers. Fortunately, both groups may be eligible for better mortgage options. All it takes is a little knowledge.