What To Do When The Lender Says "No"

Ask specifically why the loan is being turned down. Is the problem with you the borrower, or is it the property? If you're weak on loan qualifying, would a larger down payment make a difference? How about if you reduced some of your debt? Would another loan program help you qualify? Asking specific questions can get you specific answers on what needs to be changed and why.

Improving the quality of your credit will help a great deal in getting approved for a home loan.

A good quality mortgage broker will be able to help you work through the issues and tell you exactly what needs to be done in order to qualify for a future loan.

Your mortgage broker may also try another lender if your loan is denied. There are many lenders with many different programs on the market today. Flexibility is where a mortgage broker's strong point is over a bank. Your mortgage broker can search through many different sources to find a lender who will possibly fund your loan.

The most important thing is to Never Give Up! Work with your loan professional on steps to make homeownership a reality.

If you cooperate with your broker without getting anxious or disappointed, the good broker will guide you to obtain the financing you need to purchase your dream home.

You should always get a second opinion from a different lender or mortgage broker. There are plenty of lenders out there may have the program that best suits your needs.

Was your loan denied due to bad credit? If so, be sure to carefully examine your credit report for errors or duplications. There are steps you can take to have the errors removed and increase your score. After errors are corrected you should consider paying down some debts. Start with the accounts that are closest to being maxed out as this is a high risk indicator to the credit bureaus. Requesting a higher credit limit on credit cards can also reduce your percentage of used credit. As everyone's situation is different, be sure to ask your loan officer for any tips on building a strong credit report.

Most brokers are approved with 100's of lenders and still have plenty of options for you if the first lender says no. Think of it like this:
A true mortgage professional is going to try to get you in the absolutely best loan you "might" qualify for. Just because you don't qualify for your first choice doesn't mean that there isn't a great loan that would benefit your current situation.

Even though a bank may have turned you down for a mortgage loan, a mortgage broker may very well be able to get you approved with another lending institution. There are many programs out there specifically designed for customers with past credit problems, low available down payment funds, or other issues. While these programs often come with a higher interest rate, they are still worth considering. In many cases, you can get into your home, pay your mortgage on time for a year or so, then look into a refinance. By this time, your credit score will have increased significantly, and your mortgage broker will be able to offer you a new mortgage with much better interest rates.

It is important to understand the reasons you were turned down for your loan. You are entitled to get a free copy of your credit report if you have been turned down for a loan. Review your credit report with a reputable mortgage professional with access to many different programs.

If you have certain conditions that hinder your ability to get a mortgage, you may want to consult a mortgage broker. Many brokers have access to loan programs that are created to help home buyers with certain common finance blemish.

When your lender turns you down there are still options available. Your mortgage broker can contact other lenders, suggest other loan programs or help you improve your credit. You may consider waiting until you can make a higher down payment or select a lower priced home.

The most common reason for a lender to reject your application is credit score is too low, reflecting a poor payment record on past obligations.

Make sure your mortgage broker gives you a thorough pre-approval analysis to determine what the solution process is. You may only need a few adjustments to get an approval to buy a home.

» DISCLAIMER: The information contained in this article on 'What To Do When The Lender Says "No"' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.