If a mortgage application is denied, the applicant should first review the lender’s decision to identify specific issues such as credit score gaps, insufficient income, or documentation errors. Correcting these problems—such as paying down debt, improving creditworthiness, or gathering missing paperwork—is critical. Reapplying after 3–6 months with stronger financials or exploring alternative loan types like FHA or VA loans may increase approval chances. Consulting a housing counselor or financial advisor can also provide tailored guidance.

Lenders deny approximately 20% of mortgage applications due to credit score issues, with scores below 620 often rejected by conventional lenders (Consumer Financial Protection Bureau, 2022). Financial improvement, such as reducing credit utilization by 20% or more, can raise scores by 50–100 points, boosting approval odds (myFICO, 2023). Over 40% of applicants reapply after 6–12 months with adjusted financials, and 30% see approval on second attempts after addressing key weaknesses (National Association of Realtors, 2021). FHA loans, requiring scores of 580+, approve 65% of applicants versus 25% for conventional loans at similar scores (Federal Housing Administration, 2023). Financial counseling reduces approval delays by 25% by resolving documentation errors and structural issues (CFPB, 2022). These steps leverage data-driven strategies to mitigate rejection risks and align with industry trends.