In preparing its report, LendingTree crunched the numbers on average consumer credit scores, indebtedness and loan-to-value ratios for consumers seeking mortgage loans across the 50 states, the District of Columbia, and also "America" as a nationwide average -- so 52 entries in total.
The results may surprise you. (Click to view larger image.)
LendingTree, owned by Tree.com (TREE), then converted these numbers into a weighted average score running from 0 to 100 -- and ranked the entries from 1 through 52. What you see above is a LendingTree infographic reflecting the results, highlighting the 10 states with the worst "borrower health" and the 10 states with the best.
After running this report, LendingTree came away with some surprising revelations. For example:
Consumers' average credit scores in America have increased by more than 10 points over the past year -- so credit quality is improving.
Average loan-to-value ratios (the amount of the mortgage loan sought, relative to the price of the house) have declined by 1.6 percent -- so consumers are better able to afford the loans they're seeking.
41 individual states saw their average credit scores rise, and 43 saw their loan-to-value ratios decline.
LendingTree also came up with a list of the top five states in which to buy a home -- from a lender's perspective, of wanting to help homebuyers who are likely to eventually repay their loans. And the winners are...
5. California The Atlantic magazine recently pointed out that California is home to seven of the 10 most expensive metropolitan housing markets in the country. It's also the third most expensive housing market, as a state, in the entire country (as of the end of 2012), with the average house costing upwards of $431,000.
Yet according to LendingTree, the high quality of California homebuyers makes this a great state in which to lend -- or borrow -- money to buy a home. The average California homebuyer boasts a credit score of 679, a loan-to-value ratio of 85.6 percent, and scores a 90.77 (out of 100) on LendingTree's weighted scale.
Massachusetts, home to the second most expensive housing market in the land ($489,000 and up), is nonetheless No. 4 on LendingTree's list of healthy homebuyer-borrowers. Its homebuyers receive a respectable 91.76 score on the LendingTree Borrower Health Report.
Average credit scores here are a palindromic 676, just three points below those of California, while the average loan-to-value ratio matches California's 85.6 percent.
The Aloha State holds the honor of being the most expensive state in the Union in which to buy a home ($742,000), and also of hosting the most expensive municipal housing market as well -- Honolulu. Yet with a Borrower Health rating of 92.09, residents seem to have little trouble getting their mortgages approved here.
If the average loan-to-value ratio is a bit high at 87.7 percent, then the credit quality of the borrowers more than makes up for that. Credit scores average 677 points.
2. New Jersey
Despite the bad rap it gets on television (and in New York), New Jersey charges a steep price of admission to its housing market, where houses cost an average of $421,000. That makes the Garden State the fourth most expensive in the land. And yet, big incomes from commuters into the Big Apple help to defray that cost, and keep loan-to-value ratios down to a manageable 83.9 percent, while credit scores average a respectable 679 points.
Borrower health score: 93.67.
1. Washington D.C.
And finally -- drum roll, please -- we come to the No. 1 best place to get a loan to buy a house in these 50 states and one district: It's that district itself, Washington, D.C. Clearing runner-ups New Jersey and California by an even 10 points, credit scores average 689 in the District. And if the residents there bemoan "taxation without representation," well, at least they've got enough disposable income lying around to keep loan-to-value ratios down around 85.3 percent.
Put it all together, mix well, and out pops LendingTree's conclusion: With a 96.53 score for "borrower health," the nation's capital has the "healthiest" borrowers in the nation, and so should be the easiest place in the country for residents to get a new home mortgage.
Motley Fool contributor Rich Smith has no position in any stocks mentioned.
The Monster in the Closet: Economic Horrors and Scary Movies
The 5 Best States to Buy a Home -- If You're a Banker
If you thought this classic horror movie was about a haunted house, see if this scenario sounds familiar: An idealistic young couple buys a home that sounds too good to be true. Once they're mortgaged to the hilt, problems start to crop up. They can't leave, they can't stay, and an unseen evil force starts to tear their family apart.
Filmmakers have used zombies to symbolize everything from faceless corporations to the inhumanity of the military industrial complex. In this early offering (and, to a lesser extent, in its remake), it isn't particularly hard to figure out the greater symbolism of a bunch of mindless, shambling zombies swarming into a shopping mall.
Speaking of mindless shambling, "Shaun of the Dead" used the same conceit to symbolize office work.
Everybody remembers Janet Leigh's death scene in the classic slasher flick. What they forget, though, is why she ended up in the Bates Motel in the first place: She was on the run after stealing a small fortune from her employer. As for the motel itself, it was facing hard times because the recently-unveiled highway drove away business.
For a funnier take on a similar story, you might try taking a peek at "Auntie Lee's Meat Pies", which manages to brilliantly combine cannibalism, serial murder and Pat Morita.
Forget ghosts and ghouls: Few things are scarier than asking the bank for a loan. But in this Sam Raimi-directed flick, the tables are turned as a young loan officer turns a deaf ear to a seemingly feeble gypsy woman trying to borrow some money. Needless to say, all hell breaks loose.
On the surface, this 1981 classic is the tale of super-evolved wolves preying on New Yorkers. Scratch a little deeper, though, and another story emerges: The tale of wealthy Manhattanites preying on poor people in the Bronx, then being themselves preyed upon by wolves. In other words, NYC in the 1970s was truly a dog-eat-dog world.
If you want another fix or two of class-based horror, check out "CHUD" and "Street Trash," both of explore the plight of New York's invisible homeless.
Sure, Stanley Kubrick's 1980 horror film is all about telepathic kids and haunted houses and elevators full of blood. But one of the first bits of fear and tension occurs in the hotel manager's office, where Jack Torrance, a recovering alcoholic who can't seem to hold onto a job, finds himself forced to beg for a gig as the winter caretaker of a resort hotel. Anybody who remembers the travails of searching for a job will recognize this truth: The nightmare isn't being trapped a haunted house -- it's having to grovel to get a job in a haunted house.
Angus Scrimm's Tall Man character is one of the more unnerving monsters in filmland: Not only does he steal the bodies of the dead, but he also steals the souls of towns. As Reggie and Mike travel cross country, it isn't hard to pick up his trail -- they just have to look for boarded-up stores, deserted streets and abandoned homes. Of course, for 1988 audiences facing the effects of outsourcing, the monster emptying out their towns was a little harder to explain.
For another take on the "monsters-as-suburban-economics" metaphor, take a peek at "Poltergeist." Between the unethical developer who didn't bother to relcoate a graveyard and the mindless TV that saps your soul, the Tobe Hooper classic manages to hit a host of cultural touchstones!
A whole subset of horror films is dedicated to rural families living off the land ... and the miserable travelers who happen across their path. It isn't hard to see why it might be an attractive premise: After all, there's no lack of people clinging to the bottom rung of the economic ladder, and it isn't hard to imagine that they may be one paycheck away from having to make their own clothes and hunt their own meat. What happens afterward ... well, that's where it gets really ugly.
If you want even more tips on living off the land (and curious teenagers), you might check out "The Hills Have Eyes," "Wolf Creek" and "Mother's Day." For a funny take on the same premise, try "Tucker and Dale Versus Evil."