Approximately 1 in 10 (roughly 9%–10%) mortgage applications are denied, though this rate rises to over 30% for refinances. For other credit types, nearly half (48%) of consumers surveyed in early 2025 reported being denied a loan or financial product in the past year, driven by higher interest rates.
Loan, line of credit and merchant cash advance denial rates high. In 2024, about 1 in 5 businesses (21%) that applied for a loan, line of credit (LOC) or merchant cash advance (MCA) in 2024 were denied. That's similar to the 22% denied in 2023.
So, how often does an underwriter deny a loan? In 2023, about 9.4% of all home purchase applications were denied, according to data from the Consumer Financial Protection Bureau. That means just under 1 in 10 mortgage applications didn't make it past underwriting. Denial rates vary by loan type, though.
A good or excellent credit score gives you the best chance of getting a personal loan with attractive terms. If your credit score isn't up to par, try improving it or finding a co-applicant to help boost your approval odds. The amount you borrow and your debt-to-income ratio also play a role in the lender's decision.
To comfortably afford a 400k mortgage, you'll likely need an annual income between $100,000 to $125,000, depending on your specific financial situation and the terms of your mortgage.
Understanding Mortgage Affordability in Canada
For insured mortgages in Canada, CMHC recommends a maximum GDS ratio of 39%. For a $90,000 salary (which breaks down to $7,500 per month), this means your housing costs shouldn't exceed $2,925 per month.
Lenders may have certain credit requirements, such as a minimum credit score, that you have to meet to qualify. Issues like a thin credit file or a low credit score may lead to a denied personal loan application.
The 2-2-2 credit rule is a guideline for building strong credit, suggesting you should have two active credit accounts (like cards or loans) for at least two years, with consistent on-time payments for those two years, often with a minimum credit limit of $2,000 per account, to demonstrate financial responsibility to lenders, especially for mortgages. It's a benchmark to show you can handle credit well over time, reducing lender risk and improving approval odds for major loans.
Credit reports showing late payments, collections, or significant derogatory events—such as bankruptcies or foreclosures—can signal financial mismanagement and complicate underwriting.
Yes, you can likely get a $50,000 loan with a 700 credit score, as this falls into the "good" credit range (670-739) that unlocks better rates, but approval also hinges on your income, debt-to-income (DTI) ratio (ideally below 36%), and overall credit history, with lenders looking for stability and repayment ability, so prequalifying with multiple lenders helps compare terms.
In theory, if you're working with a good loan officer , there is nothing to worry about during the underwriting process . Mortgages are largely decisioned by automated tools (Automated Underwriting Systems or AUS), as long as the information your loan officer put into that system was correct, your loan will hold up.
With a 700 credit score (considered "Good"), you're well-positioned to get approved for most major loans like mortgages, auto loans, and personal loans with more competitive interest rates and terms than someone with a lower score, plus you'll qualify for better rewards credit cards and may even see lower insurance premiums. You can access a wide range of financial products, but to get the best rates, scores above 740-760 are often needed.
You cannot be arrested or sentenced to prison for not paying off debt such as student loans, credit cards, personal loans, car loans, home loans or medical bills. A debt collector can, however, file a lawsuit against you in state civil court to collect money that you owe.
Now you know the answer to the question: how much house can I afford with a 90k salary? You can likely afford a home in the $275,000 to $360,000 range. To determine approval for a home loan, lenders will also consider your credit score and DTI ratio.
Those who like to move around or travel a lot might find renting a better option, while those wanting to create roots in a single location will find buying a better choice. Think about investing in a property. Buying a home can help you gain value and build equity by making home improvements.