What to Do If You're Rejected for a Mortgage

A mortgage can be a great way to make sure you own the home of your dreams. However, getting a mortgage approved from a Florida mortgage company is not always easy. Sometimes, even after looking at all the data and doing everything right, things still go wrong at the last minute and your loan gets rejected.

If this happens to you, don't worry. The good news is that you still have alternatives. Here are a few things you can do if your mortgage application gets denied.

Things to do if your mortgage denied

Determine why the lender rejected your application

Figuring out why your application was rejected means looking at both what happened and what led to that decision. To understand what went wrong, ask yourself two important questions: Why did I get rejected? Was it because I couldn't get approved for a mortgage? Or because I couldn't get the loan amount that I wanted?

Below are a few reasons why your application might have been rejected

• You didn't provide all of the information or documentation requested by either lenders or the real estate agent handling your purchase.
• The bank might have turned down your application because you lacked details about your assets and liabilities and because you didn't provide proof of how you were going to conduct the transaction. 
• You might have made a mistake on your paperwork.
• If you filled out your application incorrectly or signed it improperly, the lender might have rejected it because that could affect whether or not it gets approved.
• You may have provided incorrect information about your income, assets, liabilities, or employment history. 
• Your credit score might have been too low. 
• If you have a low credit score, then it's likely the lender will reject your application. To minimize their risk, they do so means you might have to find a different lender or apply for a smaller mortgage.

Get more information from the lender

If you believe there has been some misunderstanding, contact the person who rejected your application. Make an appointment and ask to speak with the decision-maker. Find out why they rejected it, and see whether you can submit any documents that might make a difference. You should also inquire about what would happen if you addressed whatever was troubling them.

Explore alternatives

Ask yourself if the mortgage you were applying for is really what you need or want. If not, it might be better to find a different type of Florida mortgage loan, such as an FHA loan or a USDA loan, or even rent instead.

If you can't afford a home without a mortgage, and you're okay with living in the type of house that earned you your rejection notice, then buying might not be your top priority. However, you can always find something good enough for now and look into buying again when you have more money saved up for a down payment.

You can also try looking for a different house and reapply for a mortgage later.

Work on fixing whatever is causing the rejection

If you think your credit score might be too low, speak with a reputable credit repair agency and get their recommendations for ways that you can improve your scores over time. You might also consider having someone cosign on your application if their credit score is high enough.

If your down payment is too low, then save for it by setting up a savings account specifically for buying a house. You might able to find someone willing to lend you the money at this point.

You can also try talking with the person who rejected your application and see if they would accept an alternative type of mortgage loan, such as one that comes with a higher interest rate.

Reapply once you fix whatever was causing concern

If your credit score is high, get pre-qualified again and submit another application to the Florida mortgage lenders. You could try applying for an FHA or USDA loan if the initially rejected mortgage required a down payment of less than 20%.

The Bottom Line

While it is undoubtedly frustrating to be rejected for a mortgage, don't give up hope. With the help of a Florida mortgage company, you can be pre-qualified and eventually get your home loan. It might be a difficult journey, but your hard work and our efforts will pay off in the end when you get to bring home that house you've been dreaming about.