4 Top Things to Do When Your Mortgage Application Gets Denied

a person pointing where to sign on a contractHaving your mortgage application denied can be a deeply disappointing experience. Most people who go through this experience don’t know where to turn or what to do next. Well, there are a few things you can do to make sure that it doesn’t happen again. Here are four of them.

Fix credit report errors

Should your mortgage lender in West Jordan inform you that the main reason your application was declined was due to errors in your credit report, City Creek Mortgage suggests taking prompt action. If the mistakes were because of somebody else’s actions or a computer error, it’s your right to have them removed. The whole process should take a few days.

Raise a larger down payment

Even when your credit is less than stellar, you can still get a loan by raising a larger down payment. That’s because you borrow less money, make lower monthly payments, and subject lenders to less risk. Make sure that your down payment is at least 20% of the total cost of the house.

Reduce your debt

If you have other debts, then that’s perhaps the reason the lender declined your application in the first place. Paying off some of those debts can go a long way in convincing the lender that you’ll be in a better position to pay off your mortgage too.

Apply in another bank

Simply because one lender did not approve your loan application does not mean you cannot get approved elsewhere. That’s just one opinion, and you shouldn’t give up. Look for another lender and see what they have to say.

When your mortgage application is rejected, it does not mean that all is lost. By taking a few smart steps, you can boost your chances of getting approved next time or find another lender who might just accept your application.