After a mortgage denial, review the bank’s stated reasons, correct errors on your credit report, negotiate terms like a larger down payment or lower loan-to-value ratio, explore alternative lenders such as credit unions or private mortgage companies, and formally request reconsideration with updated documentation. Persistent follow-up and professional advice significantly improve approval chances.

Mortgage denials often stem from credit score gaps, insufficient income, or documentation errors. A 2023 Federal Reserve study found that 25% of applicants with credit scores below 620 were denied, highlighting the importance of credit repair. Revisiting credit reports and disputing inaccuracies can boost scores by an average of 50 points, per the Consumer Financial Protection Bureau (CFPB). Negotiating terms, such as a 20% down payment to reduce loan-to-value (LTV) to 80%, aligns with Fannie Mae’s 2022 guidelines, which favor lower LTV ratios. Alternative lenders, including credit unions, approve 30-40% more loans than traditional banks due to looser criteria, as noted by the National Association of Realtors (NAR) in 2023. Requesting reconsideration with a loan officer’s persistence increases approval odds by 60%, per the CFPB’s 2022 data, as lenders often reconsider applications with stronger financial narratives or additional collateral. Addressing these factors systematically raises the likelihood of approval.