Mortgage holders' financial health on the rise

by Ryan Smith10 Mar 2014
The financial health of mortgage borrowers is on the rise, according to data released by LendingTree.

LendingTree’s latest Borrower Health Report shows an almost 3% improvement in borrowers’ financial health of borrowers between the third and fourth quarters of 2013. The report calculates borrowers’ financial health using a weighted average of loan-to-value ratio, credit score and overall lendability of mortgage-seekers, according to LendingTree.

In the fourth quarter, the average credit score for all prospective mortgage borrowers was 635 – one point lower than in the third quarter. However, the average LTV dropped from 89.8 to 88.6 quarter over quarter, while the average loan amount increased from $164,998 to $168,747.

“Lenders are slightly more motivated to increase lending to homebuyers as refinancing activity drops,” said Doug Lebda, founder and CEO of LendingTree. “Borrowers still need to meet underwriting requirements, but for potential borrowers with less than perfect credit, there might be opportunities available to help them become homeowners.”

Washington, D.C., had the highest borrower health score at 97.9. Borrowers in D.C. had an average credit score of 677, an average LTV of 88.6 and an average loan amount of $309,041. West Virginia had the lowest health score at 69.56, with an average borrower credit score of 609, an average LTAV of 91.2 and an average loan amount of $103,646.


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