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When your mortgage application gets denied, the first thing you should do is find out the exact reason for the denial. If it is something simple, such as your employer would not verify your income, that is an easy fix. If you were denied for not having enough of a down payment or for having a low credit score, you may have to wait in order to get an approval. You can still apply elsewhere, because every lender has different loan guidelines. There are many sources available online you can try for your mortgage financing. Try to fix the problem, and then start the application process again.
Fix the Problem
Once you have been denied for a mortgage loan, your lender is required to provide you with a letter of denial specifying the reasons for your loan not being approved. If you can cure the problem quickly, your lender may then approve your loan. If it is going to take some time to fix the problem, begin to take immediate action so you can get your loan approved as fast as possible.
Contact your creditors if you were denied for poor credit. Arrange a repayment plan and bring your accounts current as quickly as you can. Borrow the money if you are able, and pay the accounts down right away. Your credit score will start to improve as soon as you bring your payments up to date. Even if you are unable to pay the accounts off in full, lowering the balances should help your credit.
If your lender denied your application due to an insufficient down payment amount, find out exactly what they require. If you can put down what they require, you should get your loan approved. If you are unable to meet their required down payment, start to arrange your finances so you can save the extra amount you need, and then re-apply for the loan once you have enough money.
Apply with Other Lenders
Just because one lender refused your loan request does not mean the next lender will. Check with other lenders in your area, and look for online sources that make mortgage loans. Also, be sure you apply simultaneously with several lenders, to save time in case your second choice also denies your application.
If you decide to use an online lender for your financing, be sure to perform some due diligence and research the company to make sure they are legitimate. It may be better to stay away from a lender that you have never heard of before, or one that does not disclose enough information about their company.
You do not want to accept a loan with a structure that is unfavorable, so analyze the loan terms carefully once you receive an approval. Make sure the interest rate is in line with other rates on the market and that the monthly payments are affordable. Ask your lender if your taxes and insurances are included in your payment so that you know the overall picture.
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