Declined for a Mortgage? You Could Still be Eligible for Homebuyer Assistance
According to an analysis done by Down Payment Resource, there has been an overwhelming amount of mortgage loan applications declined. It was determined that it was due to either insufficient cash-to-close or disqualifying debt-to-income ratios. These declined loan applications represent $3.7 billion in volume furnished by mortgage lenders. Most of these denied applications would have been eligible for homebuyer assistance if they had applied.
A significant portion of denied loan files were eligible for assistance programs.
- This large portion of loans that were potentially recoverable with homebuyer assistance at the time of denial demonstrates an extremely low-cost opportunity for lenders to have increased their purchase volume.
Denied applicants were found to have been eligible for multiple programs.
- Findings reported that declined applications were eligible for an average of 10 homebuyer assistance programs.
Declined loans had the potential for recovery with homebuyer assistance.
- Applying homebuyer assistance to a denied loan application on average would have reduced loan-to-value by almost 6%. This would have recovered the application and welcomed more opportunities to achieve a more affordable mortgage with different financing options, lower insurance, and interest rates.