10 States Where You Can't Get a Mortgage

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Good and bad credit count in getting a mortgage.The big problem still plaguing the improving housing market is tight lending. Requirements for scoring a mortgage are much stricter than they used to be, requiring higher credit scores for approval. So for residents of some states, you can basically kiss your chances of being offered a mortgage goodbye.

24/7 Wall St. used online mortgage application data to dig up the 10 states where people aren't getting mortgages. The primary reason why they aren't? The average credit scores in those states are the lowest in the country. It also happens that median home listing prices and average incomes in those states tend to be lower, too. But here's the interesting thing: It's not that the housing markets are particularly bad in these states -- it's just that darn credit score! Click through the gallery below to see the 10 states where people aren't getting mortgages.

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10 States Where You Can't Get a Mortgage
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10 States Where You Can't Get a Mortgage

Average mortgage application credit score: 716
Average down payment: $24,661 (12th lowest)
Median listing price: $216,000 (19th highest)
Median household income: $56,322 (13th highest)

While it remains among the worst, Wyoming’s mortgage application credit standing has improved significantly in the past year. In 2011, the average credit score of online mortgage applicants was just 704, the sixth lowest in the country at the time. Wyoming’s economy has been buoyed by a nationwide oil and natural gas boom, bringing jobs and wealth to the state. As of December 2012, the unemployment rate in Wyoming was just 4.9%, the fourth-lowest rate in the country. In addition, the median household income of $56,322 in 2011 was among the top third of all states and significantly better than the $50,502 across the country.

Find homes for sale in Wyoming, or search listings in your area.

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Average mortgage application credit score: 715 (tied for 8th lowest)
Average down payment: $30,579 (25th lowest)
Median listing price: $174,500 (24th lowest)
Median household income: $49,392 (25th highest)

Texas has done better than nearly any other state in terms of weathering the tough housing market of the past several years. Home prices in the state rose by 4.6% between the second quarter of 2007 and the same quarter of 2012, the third-highest growth percentage in the country. Although the unemployment rate of 6.1% as of December 2012 was better than the 7.8% nationwide, a higher proportion of those jobs were on the lower-end of the wage scale. Texans’ household median income of $49,392 in 2011 was about $1,110 below the national median. The state also had one of the highest percentages of minimum wage jobs in the country, with 8% of jobs paying minimum wage or less, compared to 5.2% across the country.

Find homes for sale in Texas, or search listings in your area.

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Average mortgage application credit score: 715 (tied for 8th lowest)
Average down payment: $22,644 (4th lowest)
Median listing price: $149,900 (15th lowest)
Median household income: $41,693 (6th lowest)

Tennessee is a state still reeling from the housing downturn, and homes in the state are cheap for those families applying for a mortgage loan. While the median home price between December 2011 and December 2012 remained unchanged across the country, it fell by 6.3% in Tennessee over the same period. That was a larger drop than any other state on this list and one of the largest drops of all 50 states. Tennessee’s housing market is expected to struggle in the coming years as well. Between the second quarter of 2012 and the same quarter in 2017, home prices are expected to rise at an annual rate of 2.2%, the fifth-lowest expected growth rate of all states and significantly worse than the 3.3% annual growth rate expected nationwide. Tennessee’s median household income was $41,693 in 2011, the sixth-lowest rate among all states. The average mortgage down payment was just $22,644, the fourth lowest in the country.

Find homes for sale in Tennessee, or search listings in your area.

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Average mortgage application credit score: 712
Average down payment: $25,344 (14th lowest)
Median listing price: $138,400 (9th lowest)
Median household income: $41,141 (4th lowest)

Although Kentucky was spared from much of the housing crisis damage, the state struggles with low median household income and high poverty. The median income in Kentucky was just $41,141 in 2011, the fourth-lowest rate in the country. The state is very poor, with more than 19% of the population living in poverty in 2011, the sixth-highest poverty rate of all states. Like the majority of states on this list, because its residents cannot afford to take it on, Kentucky’s debt levels were lower than most. The average household credit card debt of $4,870 in January, 2013 was the seventh-lowest of all states, while the average mortgage debt in the same month was just $115,039, the sixth lowest.

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Average mortgage application credit score: 708
Average down payment: $25,233 (13th lowest)
Median listing price: $235,000 (11th highest)
Median household income: $67,825 (2nd highest)

Unlike most states on this list, Alaska has higher incomes and higher levels of debt compared to most of the country. Alaska’s 2011 household median income of $67,825 was the second highest of all states. The average credit card debt of an Alaska household as of January 2013 was $6,821, the highest of all states, while the average mortgage debt was $193,158, among the top quartile of all states. While Alaskans had among the worst credit scores for online mortgage applicants in 2012, their overall credit score in January was 654, actually the 12th best in the country.

Find homes for sale in Alaska, or search listings in your area.

Photo: Wikimedia Commons

Average mortgage application credit score: 704
Average down payment: $19,752 (3rd lowest)
Median listing price: $137,500 (8th lowest)
Median household income: $43,225 (10th lowest)

The housing market in Oklahoma did not get slammed like most other states. Between the second quarter of 2007 and the second quarter of 2012, home prices rose 3%, compared to a fall of 27.6% across the United States. However, homes remain relatively inexpensive in the state. The median list price in December 2012 was just $137,500, the eighth lowest of all states. Oklahoma residents also had low levels of debt. The average household credit card debt as of January 2013 was $4,861, the fifth lowest of all states. Meanwhile, the average mortgage debt was $110,096, lower than all but three other states.

Find homes for sale in Oklahoma, or search listings in your area.

Photo: Wikimedia Commons

Average mortgage application credit score: 702 (tied for 3rd lowest)
Average down payment: $24,437 (10th lowest)
Median listing price: $138,900 (10th lowest)
Median household income: $38,482 (2nd lowest)

The average credit score for online mortgage applicants in West Virginia of 702 in 2012 was up five points from the year prior, helping to move West Virginia from third worst in 2011 to fourth worst last year. The 2011 median income in West Virginia was just $38,482, lower than any other state except for Mississippi. Like many states on this list, West Virginia had very low levels of debt. The average credit card debt of West Virginia households was $4,823, the fourth lowest amount of all states. The average mortgage debt as of January was just $105,041, lower than any state except for Mississippi.

Find homes for sale in West Virginia, or search listings in your area.

Photo: Wikimedia Commons

Average mortgage application credit score: 702 (tied for 3rd lowest)
Average down payment: $29,118 (23rd lowest)
Median listing price: $159,900 (22nd lowest)
Median household income: $41,734 (7th lowest)

Louisiana’s household median income in 2011 of $41,734 was the seventh lowest in the country and nearly $9,000 below the U.S. median. Meanwhile, more than 20% of the population lived in poverty in 2011, the third-highest rate in the country. However, the unemployment rate of just 5.5% in December 2012 was lower than most states and more than a percentage point and a half better than the year before. Louisiana’s online mortgage applicants had significantly better credit scores than the credit scores of the state population as a whole. The average credit score of all residents in Louisiana was just 625, also the third lowest of all states.

Find homes for sale in Louisiana, or search listings in your area.

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Average mortgage application credit score: 693
Average down payment: $17,391 (the lowest)
Median listing price: $143,500 (13th lowest)
Median household income: $38,758 (3rd lowest)

Arkansas was one of just two states where the average credit score of online mortgage applicants was below 700. The average down payment for a home in Arkansas was just $17,391, the smallest down payment of all states. The housing market has improved recently, with home prices climbing 7.2% in the state between the second quarter of 2011 and the same quarter in 2012. This was the third-largest growth rate in the entire United States. The median listed home price in the state was just $143,500 in December of 2012, on the lower end of all states.

Find homes for sale in Arkansas, or search listings in your area.

Photo: Wikimedia Commons

Average mortgage application credit score: 689
Average down payment: $24,253 (9th lowest)
Median listing price: $141,500 (12th lowest)
Median household income: $36,919 (the lowest)

Mississippi residents applying for mortgages online had the lowest credit score of all states, with an average score of just 689. The median list price of homes in December 2012 was $141,500, among the bottom quartile of all states. In 2012, the average down payment was $24,253, the ninth-lowest down payments in the country. But the low prices and down payments make sense given that Mississippi is the poorest state in the country. In 2011, the state’s household median income of $36,919 and poverty rate of 22.6% were both the worst in the country. The average mortgage debt in January, 2013 was $104,613, while the average credit card debt was just $4,217, both the lowest of all 50 states.

Find homes for sale in Mississippi, or search listings in your area.

Photo: Wikimedia Commons

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