Not Approved for a Mortgage?

If you've been denied a mortgage, you may feel like there's no hope for you to ever own your own home. Well, don't despair. There are things you can do to correct the situation and get approved on your next application.

First and foremost, you need to understand why you were denied. The lender is required to disclose the reason for their decision within 30 days, but I suggest you speak with them before that and have them explain things to you in detail. You can't fix the problem until you know what the problem really is.

The problem may be as simple as missing documentation. Or it could be your debt to income ratio is just a little high, and paying off a small credit card could bring you back into the margin for approval. I had a client once who paid off an under $500 credit card after the first lender denied them, and the second lender approved the application right away. Maybe a co-signer is all you need. Or perhaps you don't have enough cash and a gift from a friend or family member can get you approved. There's also a crowd sourcing option to help you save more, and there are many down payment assistance programs available. Maybe you just need to adjust your budget and buy a less expensive property until you can afford more, or you could try a rent to own option.

If your situation is not quite that simple, you may need to speak to the professionals. There are many community-based counseling programs to help with home ownership. Here's one for my market. Ask your Realtor and Google is your friend (try government sites first). There are programs such as NACA that help you get your finances in order and give you a mortgage when you're ready. If your credit score is your issue, speak with a professional credit counselor who can help.

Whatever your situation, don't give up. There are resources available to help you achieve the dream of home ownership.