News & Media
women looking at paperwork filling out forms
AJ_Watt / Getty Images

3 out of 10 Florida Homeowners Can’t Refinance Their Mortgage

A LendingTree study found that 68.2% of Floridians get turned down when they try to refinance their home, making it second to last behind only New Mexico’s 66.5%.

NEW YORK – Home value appreciate and credit scores matter most if a homeowner wishes to refinance their mortgage to a lower rate, and over the past year, mortgage interest rates have dropped more than 1 percentage point. That’s created a rush to refinance, but homeowners in some states have better luck at refinancing their mortgage – and Florida isn’t one of them, according to a data analysis from LendingTree that analyzed more than 10 million mortgage refinance approvals by state and compared those rates to home-price appreciation and average credit scores.

Overall, about 75% of mortgage refinance applications are approved nationally, but only about 68.2% of Floridians are able to finance. The state is second-to-last in success rate, ahead of only New Mexico with a 66.5% success rate.

Florida’s refinancers had an average loan amount of $248,151, and home value appreciation (2012-2018) of 39%. Their average credit score was 741 compared to an average 713 for all Florida consumers.

In the study, Utah homeowners had the highest approval rate at 82%, followed by applicants in North Dakota (80.5%) and South Dakota (80.1%).

Many homeowners bypass refinancing altogether, but they may be passing up some big savings. A borrower who had a $300,000 loan in November 2018 at a 4.75% mortgage rate could save about $200 per month on their payment and more than $50,000 on lifetime interest by refinancing at 3.75%, according to a LendingTree example.

“The availability of a lower interest rate is only one of the conditions needed to refinance a mortgage,” says Tendayi Kapfidze, LendingTree’s chief economist and lead author of the study. “Borrowers often need to have some equity in their home, especially if they want to take cash out, and a solid credit score. Fortunately, increases in home prices since 2012, combined with paying down their loan balances, means many borrowers have built considerable equity in their homes.”

Homeowners with strong home value appreciation see an interest rate difference of 0.50, while those with strong credit scores see a rate difference of 0.64 in their favor, the researchers found.


© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688