The average mortgage borrower in 2012 paid an interest rate of 3.90 percent on a 30-year loan and put up a down payment or home equity of 21 percent, according to a year-end review by mortgage software provider Ellie Mae.
Those who were able to qualify had average FICO credit scores of 748 and an average debt-to-income ratio of 34 percent, with mortgage payments and related costs taking up 23 percent of monthly income.
Summary of 2012 mortgage requirements
The end-of-year report provides a look at what it took to obtain a mortgage in 2012, as well as information about the loans borrowers obtained. It also provides a snapshot of borrowers who were turned down for mortgages as well.
Borrowers whose mortgage applications were denied last year had an average FCIO score of 704, with a down payment or home equity equal to 14 percent of the home value (86 percent loan-to-value ratio).
Denied borrowers were seeking mortgages where their mortgage payments would have averaged 27 percent of their monthly income and given them a total monthly debt-to-income ratio of 44 percent.
Refinancing 62 percent of approved loans
The great majority of all mortgages closed in 2012, 62 percent, were for mortgage refinancing, according to Ellie Mae's figures, with the other 38 percent being for home purchases. By comparison, the Mortgage Bankers Association has consistently reported over the past year that about 80 percent of all mortgage applications are for refinancing, suggesting that purchase applications have a considerably higher approval rate.
It's worth noting that refinancing has become significantly easier for homeowners with little or no home equity over the past 15 months. According to the company's figures, only 1.9 percent of all mortgages refinanced in October 2011 had less than 5 percent equity (including underwater mortgages); that share has since increased to 11.40 percent of all refinances in December 2012.
Average FHA credit score of 700
As one might expect, the requirements for FHA mortgages were considerably more lenient than for conventional home loans. Borrowers approved for FHA home purchase mortgages had average FICO scores of only 700, lower than the average for those rejected for conventional mortgages.
FHA purchase mortgages had an average down payment of only 4 percent, while FHA mortgage payments averaged 27 percent of borrower's monthly incomes, with total debt-to-income averaging 44 percent.
Overall, 79 percent of all mortgages last year were for 30-year fixed-rate mortgages. Another 18 percent were listed as 15-year loans, with adjustable-rate mortgages accounting for only 3 percent of all mortgages in 2012.
The figures are based on mortgage applications processed through Ellie Mae's software, which covers some 20 percent of all U.S. home loan applications.