What Can I Do If My Application for a Mortgage Is Denied?

You have several options:

• Find Out the Reason for Your Rejection Before Re-Applying. Two common reasons for being denied a loan are poor credit scores (or a lack thereof) and insufficient income.

• Check Your Credit Report for Errors. An error on your credit report can prevent you from qualifying for better loan rates and terms or from qualifying for a mortgage. Before you shop for a new mortgage lender, you should review your credit report and resolve any errors that you find. It is a time consuming process that is best started before the application process. Once errors are corrected, your credit score should be updated after a few days.

• Ask Lenders If They Anticipate Any Problems. Speak with a lender's representative to learn what documents and other qualifications they require before you fill out another application.

• Pay Off Other Debts That May Influence Your Credit Evaluation. Lenders will check your total monthly debt payments prior to issuing you a new loan. In order to increase lenders' confidence in your ability to repay, you should reduce your outstanding debts.