When it comes to mortgage rejections, Fla. is No. 1
ORLANDO, Fla. March 3, 2017 What happens after a home sale closes and the new buyer has keys in hand? In the days and months that follow, how do most new homebuyers feel?
To determine new homeowners satisfaction, NerdWallet created its first Home Buyer Reality Report. It looked at owner satisfaction with the buying and lending process, mortgage preapproval, borrowers who failed to make it to closing and successful buyers regrets after they sign their final document.
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 havent done the proper research and you dont 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 dont 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 dont understand the mortgage process or dont 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 arent doing enough research on themselves or the mortgage process before applying for a home loan.
Other key findings
- 41% of mortgage applicants felt didnt know all their loan options during the process
- 49% said they would have done something differently
- 28% felt they werent a priority to their mortgage professional
- 42% said the homebuying process was: stressful, complicated (32%) or intimidating (21%)
- 41% said the process was manageable; 30% said it was rewarding
- 27% of millennials got a mortgage rate they thought they could afford when purchasing
- 11% of millennials didnt feel financially secure after purchasing
- 26% of Gen X applicants said the mortgage experience wasnt positive compared to millennials, even though they were just as likely to be approved
- 25% of millennials, 20% of Gen X and 10% of baby boomers were approved at a higher interest rate than expected
- 57% of millennials, 61% of Gen X and 38% of boomer homeowners had regrets, saying they would do things differently the next time around