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32% Of Applicants With Less Than Perfect Credit Were Denied Mortgages...

You're driving through your dream neighborhood on the way to see a home for sale, your mind is already flooded with images of a new life. It’s easy to see how shopping for a house is exciting. Traditionally, the ODR or observed mortgage denial rate is calculated from Home Mortgage Disclosure Act data released by the government. Among their findings is the fact that the RDR jumps to 52% for small-dollar mortgages (those at or below $70,000). This means that low-credit profile applicants were applying for mortgages of all sizes. In fact, while 34% of applicants for small-dollar loans had low-credit profiles, that number was still 30% for mortgages greater than $150,000. If you aspire to join the ranks of homeowners, this data might be scary. In the HFPC study, the strongest applicant profiles (those with the lowest chance of being denied) had a credit score above 700, a loan-to-value ratio less than 78%, a debt-to-income ratio less than 30%. With a plethora of free credit report and credit score checking and monitoring apps and services available, most people have run out of excuses for not keeping an eye on their credit scores or knowing how to improve them. While a Real Denial Rate of 32% means that low-credit profile applicants still have a 68% chance of approval, these figures should give you pause and prompt you to consider whether you are financially ready to purchase a home.