50 Ways You Might Get Declined for a Mortgage

Mortgage and Lending NMLS#914312

(If you work with a big bank or inexperienced loan officer)


 50 Ways You Might Get Declined on your Mortgage

You might have great credit and a fantastic FICO score… Guess what…

You could still have roadblocks when you work with a big bank or inexperienced loan officer. There are a ton of underwriting guidelines that must be met for typical conventional loans.

Below are 50 ways your loan can be denied:

  1.    Trying to buy too much house
  2.    Debt To Income ratio maximums exceeded
  3.    Credit score too low
  4.    Not enough Income
  5.    Inability to document income
  6.    Using rental income to qualify
  7.    Past delinquencies
  8.    Past foreclosure, short sale, BK
  9.    Mortgage rates rise and push payments too high
  10.         Payment shock
  11.         Loan To Value too high
  12.         Inability to obtain secondary financing
  13.         Underwater on mortgage
  14.         Not enough assets
  15.         Unable to verify assets (mattress money is a No No)
  16.         Unpaid alimony or proof of child support income received
  17.         Divorce issues
  18.         No rental history
  19.         No job
  20.         Job history too limited – (2 year history same line of work)
  21.         Changed jobs recently
  22.         Self-employment issues
  23.         Using business funds to qualify
  24.         Limited credit history
  25.         Spouse’s/ Co Borrowers credit score too low
  26.         Too much debt
  27.         Undisclosed liabilities
  28.         New or closed credit accounts
  29.         New/changed bank account
  30.         Credit errors
  31.         Unpaid tax liens
  32.         You Co-signed for other loans – effecting your DTI
  33.         Property not really owner-occupied
  34.         Layered risk (lots of questionable things added together)
  35.         Incomplete application
  36.         Inability to verify key information
  37.         Fraud/lying
  38.         Undisclosed relationships with seller
  39.         Attempting to buy multiple properties
  40.         Property doesn’t appraise at value
  41.         Defects with property
  42.         Home business on property (Some are OK)
  43.         Non-permitted work to the home (garage conversions)
  44.         HOA issues
  45.         Investor concentration in complex too high
  46.         One entity owns too many units in complex
  47.         Title issues
  48.         Lender overlays (Some Big Banks make up extra rules)
  49.         You own multiple properties
  50.         Good old fashioned mistakes (human error)


Now some GOOD NEWS if you are rejected for a mortgage, it’s important to sit down with your loan officer and find out the reason behind that decision.



If you were honest on your loan application and have sufficient income and a half way decent credit score, sometime working with a more skilled loan officer is what it takes to get it done.



Working with a local Broker will give you more choices and more programs to fit the different credit profiles and income scenarios. When you work with a big bank, you get 1 set of rules. If you don’t fit their rules… too bad. 



Choosing a local broker and loan officer with experience in purchase business, will give you access to many more options and programs.

Experience makes all the difference sometimes, to make credit/ income situations fit the hundreds of programs available.



There is also the possibility of a red flag or some unknown issue. Learning what that problem is, and having a skilled loan officer that knows how to fix it, is key.



If you have had a recent decline on your mortgage application and want a second chance or an experienced set of eyes to see what other alternatives you may have, please call 949-600-0944 or email me with your questions jackie@mylenderjackie.com or visit www.mylenderjackie.com 


 Right Choice Mortgage, located in Orange County and serving all of California – Has an extensive lender network, we find the best possible solutions and will do what it takes to get it closed.



Our borrowers get the best pricing, fastest turn times and specialized programs to meet their varied needs.


Products offered: Purchase and Refinance, FHA, Conventional, VA & Portfolio. We have programs to serve Jumbo Loans up to 3 Million and everything in between and down to 550 credit scores.



Comments (4)

Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Denver Broker / Real Estate Advocate

Lots of good information,  ... the buyers in Orange County will be blessed to have you working their loan!!

Mar 12, 2016 06:27 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

I would have thought of maybe 12 reasons... but 50!  What a great list (or maybe not so great, if you are violating any of those 50 rules).

Mar 12, 2016 08:49 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

Kind of like " 50 ways to leave your lover"   Thanks for the list of 50!

Mar 12, 2016 08:56 AM

More like 50 ways to leave and find a better  Lender !

Mar 16, 2016 03:46 PM
Certified Mobile Notary Signing Agent - Smith Mountain Lake, VA
Highest Ranked Certified Mobile Notary in Virginia

Jackie Barikhan is so right and these things apply for both of us though we are 2500 miles apart !   Whether you are on the west coast (Jackie in California) or on the east coast (little ol' ME in Virginia); we are here to help you through the mortgage process and make sure you reach number 51, . . . . . APPROVED !

Mar 16, 2016 03:50 PM