| Having your mortgage application denied can be a | | | | Many lenders will deny your application if the payment |
| humiliating experience. The first step to having your | | | | amount is greater than 28 percent of your monthly |
| application approved is not to take the denial personally | | | | income. If your total monthly debt obligation is greater |
| and correct whatever problems you have. Here is all | | | | than 36 percent of your monthly income your |
| you need to get started. | | | | application could be denied. If this is the case you need |
| Understanding why your mortgage application was | | | | to pay down your debt as much as possible in order |
| denied is important to correcting the problem. Talk to | | | | to be approved. |
| the lender and find out exactly why the loan was | | | | Bad Credit |
| denied. Here are several common reasons for | | | | If your credit score is too low to be approved there |
| mortgage application rejection. | | | | are steps you can take to improve it. Your credit |
| Your Loan-to-Value Ratio on the Property is Too High | | | | score is based on a number of factors in your credit |
| If the loan-to-value ratio of the property is not right the | | | | reports. Your repayment history is one such factor. By |
| lender will deny your mortgage application. If this | | | | improving your record of on-time payments for at |
| happens it means you are trying to borrow is too | | | | least six months you will improve your credit score. |
| close to the amount your property was valued at | | | | Reducing your debt-to-income ratio will also improve |
| appraisal. Mortgage lenders have thresholds that | | | | your credit score. Pay down the balances on your |
| loan-to-value ratios must fall into for approval. To be | | | | credit cards and close the accounts if possible. |
| approved you may need to borrow less; one way to | | | | Finally, make sure your credit reports are accurate. |
| do this is to increase your down payment amount. | | | | You will need to request records from each of the |
| Insufficient Down Payment | | | | three credit reporting agencies and scrutinize these |
| Many traditional mortgage lenders require at least a | | | | reports for errors. Each agency has their own |
| 20% down payment. If you do not have this much you | | | | procedure for disputing errors; if you find errors in your |
| may not qualify for traditional financing. If this is the | | | | credit reports dispute these errors before you start |
| case you will need to secure the necessary down | | | | reapplying for a mortgage. |
| payment to qualify. An alternative is to seek a lender | | | | To learn more about the mistakes homeowners make |
| that will approve 100% financing or grant you a | | | | when applying for a mortgage that lead to denial, sign |
| piggyback mortgage for the down payment. | | | | up for a free mortgage guidebook. |
| Income too Low | | | | |