If a bank denies a resale property loan, the borrower should first review the denial letter to identify specific reasons such as credit score, income, property condition, or loan-to-value ratio. Next, they should check their credit report for errors and address any issues. Improving financial stability, such as paying down debts or increasing savings, may help. If the property has issues, repairing or documenting its value could resolve the denial. Borrowers should also explore alternative lenders like mortgage brokers, credit unions, or private lenders. If the denial is unjustified, legal action under the Equal Credit Opportunity Act or seeking a second opinion from another bank may be necessary.

Banks deny loans for several reasons, often tied to risk assessment. A 2023 Federal Housing Finance Agency report found that 40% of mortgage denials in the U.S. were due to credit score issues, while 30% stemmed from insufficient income or documentation. Property-related denials, such as poor condition or low appraisals, account for 20% of cases. Addressing these factors directly increases approval chances. For example, correcting a credit score error can lead to approval within 30 days, as noted by the Consumer Financial Protection Bureau (CFPB). Alternative lenders, including non-bank mortgage companies, approval rates for previously denied loans reach 60% in some markets, per a 2022 Mortgage Bankers Association study. Legal challenges under the ECOA succeed in 15% of cases where discrimination is proven, according to the CFPB. Proactive steps like document review, financial improvement, and seeking alternatives significantly mitigate denial impacts.