Roughly one in five US mortgage applications that reach a decision is denied — about 19.6% in the 2023 HMDA data. Knowing why helps you fix problems before you apply.
Informational only. These are the reasons lenders report in aggregate; your situation is individual. This is not lending advice — talk to a licensed lender.
The leading reasons
| Reason | What it means | What can help |
|---|---|---|
| Debt-to-income too high | Monthly debts are too large a share of income | Pay down debt; reduce the loan amount |
| Credit history | Low score, late payments, or a thin file | Build on-time history before applying |
| Insufficient collateral | Appraisal or property value doesn’t support the loan | Larger down payment; different property |
| Unverifiable income | Income or employment can’t be documented | Provide complete pay and tax records |
| Incomplete application | Missing documents or information | Respond promptly to lender requests |
A single application can list several of these. See the fuller guide on why mortgage applications get denied.
Why the denial rate varies so much by state
Because denial tracks the applicant pool and loan mix, not just lender strictness, the rate ranges from under 12% in the Upper Midwest to over 30% in Louisiana. States with lower incomes relative to home prices, more first-time buyers, or a bigger FHA share tend to show higher rates. See the highest and lowest denial-rate rankings.
Purchase vs refinance
Refinance applications are frequently denied at a different rate than purchase loans. On each state page we show the two separately — in many states the refinance denial rate is noticeably higher, partly because cash-out refinances at today’s rates are harder to justify.
Improve your odds first
Before applying, the highest-leverage moves are lowering your debt-to-income ratio and tightening your credit. Then estimate a realistic price with the mortgage calculator so the loan amount fits your income.
Sources
HMDA Data Browser (2023, public domain). Denial rate = denied ÷ (originated + denied). See our methodology.