LendingTree Borrower Health Score Falls 4.5 Points in Q1 2014
Improved home values and looser credit guidelines widen the pool of potential borrowers
CHARLOTTE, N.C., June 4, 2014 /PRNewswire/ -- The financial health of prospective borrowers dipped slightly in the first quarter, according to LendingTree's Borrower Health Report, released today. The minor decrease in the Borrower Health Score suggests that there is now a wider pool of mortgage seekers as home prices improve and credit guidelines ease. The report analyzes the financial health of mortgage-seekers and assigns a Borrower Health Score used in the ranking of each state.
During the first quarter, the average loan-to-value [LTV] ratio of potential borrowers increased slightly from 88.6% to 88.75%. Because LTVs are a key qualifying factor, the increase in LTVs likely resulted in a decline of the Borrower Health Score, which fell 4.5 points to 77.7 in the first quarter. Additionally, the average credit score of prospective borrowers remained flat at 635.
Although borrowers may not be in top financial condition in all markets, the Borrower Health Score is 1.3 points above where it was just a year earlier. This year-over-year improvement implies that mortgage-seekers are in relatively good health and that there is broader trend of improving borrower qualification levels. A few areas have seen a marked improvement, suggesting a more competitive buyer's market.
"As home prices improve and lenders loosen restrictive lending guidelines, there is a wider pool of borrowers that are able to qualify for a loan," said Doug Lebda, founder and CEO of LendingTree. "Potential borrowers with a solid financial portfolio who may not have qualified for a mortgage two years ago may find it easier to qualify today. And with rates still historically low, we could see an active home-buying season."
Washington D.C., New Jersey, California, Hawaii and Massachusetts continue to lead the nation with the healthiest prospective borrowers, all with scores above 90. The average LTV ratios and credit scores for the top five states are below.
| State |
Heath Score |
Avg. Credit |
Avg. Loan Amount |
Avg. LTV Ratio |
| DC |
98.7 |
679 |
$ 325,603.15 |
86.59% |
| NJ |
97.2 |
665 |
$ 303,628.08 |
86.34% |
| CA |
94.8 |
668 |
$ 308,758.56 |
88.31% |
| HI |
94.3 |
662 |
$ 224,915.21 |
85.24% |
| MA |
94.1 |
646 |
$ 209,117.50 |
89.05% |
About LendingTree, LLC
LendingTree, LLC is the nation's leading online source for competitive home loan offers, empowering consumers during the mortgage, refinance or auto loan process. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 30 million loan requests and $214 billion in closed loan transactions. LendingTree provides access to lenders offering mortgages and refinance loans, home equity loans/lines of credit, and more. LendingTree, LLC is a subsidiary of Tree.com, Inc. (TREE). For more information go to www.lendingtree.com, dial 800-555-TREE, join our Facebook page and/or follow us on Twitter @LendingTree.
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SOURCE LendingTree
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