If a mortgage lender denies your application, follow these steps: First, review the denial letter to identify specific reasons for rejection. Request a copy of the underwriter’s report to understand detailed objections. Contact the lender to clarify ambiguities and ask for a formal appeal process. Address inaccuracies in credit reports, income documentation, or asset proofs. If issues persist, consider reapplying with corrected materials or explore alternative lenders offering flexible terms. For example, if credit score deficiencies caused denial, refinancing through a government-backed program like FHA loans may help.

Denial reasons often stem from credit score gaps, insufficient income, or document errors. According to the 2022 Consumer Financial Protection Bureau (CFPB) report, 62% of mortgage applicants face rejections due to credit issues or documentation problems. The Federal Housing Finance Agency (FHFA) data shows that 45% of denied borrowers successfully resubmit applications after correcting errors, with 28% achieving approval. Proactive communication and evidence-based appeals increase reconsideration success rates. Lenders are legally obligated under the Equal Credit Opportunity Act to provide clear denial reasons, enabling applicants to contest unfair decisions or seek alternatives. For instance, the 2023 FHFA study found that 34% of applicants who provided additional income verification or asset declarations saw reapprovals. Alternatives like conforming loans, non-QM products, or loan modifications can bypass traditional underwriting hurdles. Timely follow-ups within 30 days of denial improve outcomes, as lenders often prioritize unresolved cases.