Cities where borrowers are most likely to get denied for a mortgage

Thanks to low mortgage rates, it’s generally a good time for prospective homebuyers to consider making a purchase.

Further, as previously reported by FOX Business, more homebuyers have enjoyed easier access to home loans.

The Home Mortgage Disclosure Act (HMDA) showed purchase mortgage denials are at their lowest level since at least 2004.

Using the most recent HMDA data available from 2018, LendingTree looked at more than 10 million mortgage applications to find out how many mortgage applications were denied – and why.

The study found that about one-in-10 borrowers are denied – and usually for financial reasons. More specifically, debt and credit history were the biggest challenges. The other top reasons for denials were collateral and incomplete applications.

Here’s a look at the cities where mortgage borrowers were most likely to get rejected.

1. Miami

The denial rate in Miami was 11.6 percent.

The primary reason borrowers were rejected was their debt-to-income ratios, which accounted for more than 32 percent of denials. Another 22 percent were due to collateral.

The median sale price of a home in the city is $326,200, according to real estate site Zillow.

2. Orlando, Florida

In Orlando, the denial rate was 10.9 percent.

Those rejections were primarily driven by debt-to-income (36.5 percent), followed by credit histories (18.8 percent).

The median price of homes sold in the metro is $246,900.

3. Tampa, Florida

About 9.5 percent of mortgage borrowers in Tampa, Florida, were rejected. Once again, debt-to-income was the primary factor for those denials – making up 33.1 percent. Collateral made up 19.1 percent.

The median price of homes sold is $238,300.


Here’s a look at which cities rounded out the top 10:

4. Jacksonville, Florida

Denial rate: 9.5 percent

Primary reason: Debt-to-income ratio

5. Detroit

Denial rate: 9.4 percent

Primary reason: Debt-to-income ratio

6. Birmingham, Alabama

Denial rate: 8.8 percent

Primary reason: Credit history

7. Houston

Denial rate: 8.7 percent

Primary reason: Debt-to-income ratio

8. San Jose, California

Denial rate: 8.7 percent

Primary reason: Debt-to-income ratio

9. New York

Denial rate: 8.5 percent

Primary reason: Debt-to-income ratio

10. San Antonio

Denial rate: 8.4 percent

Primary reason: Debt-to-income ratio


On the other hand, the cities where borrowers were least likely to get denied were Minneapolis, Salt Lake City and Kansas City, Missouri.