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Smarter in 60 - Why Some Mortgages Are Denied

Smarter in 60 - Why Some Mortgages Are Denied


It’s unfortunate, but sometimes home buyers are denied a mortgage…and wonder what went wrong? There are a variety of reasons why you might be denied a mortgage.

One of the most common reasons is that the borrower has a bad credit score. But bad credit isn’t the only reason tied to the borrower’s finances. A borrower may be denied if they can’t provide the needed down payment and closing costs, have a high debt-to-income ratio or have no credit at all. 

With so much money at stake and so much risk to lenders, if they don’t do their due diligence, you can bet you’ll be vetted pretty thoroughly. If you are unable to meet underwriting standards or your home does not qualify—then lenders may deny the mortgage.

A common reason for denial not tied to the borrower’s financials is that the property’s appraisal was lower than the purchase price. That will likely cause a problem with the loan-to-value ratio of the home.

The bottom line is that the lender you work with should be able to tell you specifically what caused your denial.  And a good lender may be able to help you work through the issue to get you into your dream home.

Our Peoples mortgage lenders will help you with the home buying process and can pre-qualify you so that you know how much house you can afford. You can apply online by selecting a lender or calling 888.929.9902 and asking to speak to a mortgage lender.