If mortgage bank approval is denied, review the denial reason to address specific issues such as credit score, income documentation, or property requirements. Consider improving your credit score through timely payments and reducing debt. Explore alternative lenders like credit unions, private lenders, or government-backed programs (e.g., FHA or VA loans). Negotiate terms with the original lender if documentation gaps exist. If refinancing is not feasible, explore short-term solutions like bridge loans or rental income strategies to strengthen future applications.

Denial often stems from credit score inaccuracies, insufficient income, or property value concerns. For instance, the Consumer Financial Protection Bureau (CFPB) reports that 20% of mortgage applications were denied in 2022, with credit score issues cited as a primary factor. Improving a credit score by 100 points can increase approval chances by 50%, according to FICO data. Alternative lenders like credit unions offer lower interest rates (e.g., 3.5–4.5% for conforming loans vs. 5–6% from traditional banks), as shown by the National Credit Union Administration. Government programs such as FHA loans require only 3.5% down payment and accept lower credit scores (500+), making them accessible to borrowers excluded by conventional lenders. Loan modifications, averaging a 60% approval rate per Federal Housing Finance Agency (FHFA) reports, can also help adjust payment terms post-denial. Proactively addressing these factors raises the likelihood of securing alternative financing.