(Washington, DC) — Half of all loan applicants, whether for home mortgages, car loans, or other form of financing, have been denied by lenders. Bankrate Analyst Sarah Foster says this trend started about two years ago.
“Since March 2022, which is when the Fed first began raising interest rates to fight this round of inflation, they have been denied and 17-percent of them have faced more than one denial,” stated Foster.
Foster says the current interest rate for a home loan is about seven-point-two percent. She goes on to say that a monthly payment on a 500-thousand dollar home loan today would be 62 percent more than when rates were at historic lows. She says loan-seekers need to know that a basic rule of thumb followed by lenders is that a mortgage payment should not be more than 28 percent of an applicant’s monthly take-home pay.
