When a mortgage approval is denied, the first step is to review the lender’s specific reason for rejection. Common issues include credit score discrepancies, insufficient income, property valuation problems, or documentation gaps. Addressing these requires correcting errors, improving financial health, or seeking alternative solutions. For example, if credit is the issue, dispute inaccuracies with credit bureaus and pay down debts to boost scores. If income is lacking, provide additional proof of earnings or consider a co-signer. If the property doesn’t meet standards, resolve issues like repair liens or pest infestations. Alternatively, explore loans with looser requirements, such as FHA or VA mortgages, which may offer lower down payments or relaxed credit criteria. Patience is critical; reapplying after 3–6 months with stronger documentation often increases approval chances.

Data supports these steps. The Consumer Financial Protection Bureau (CFPB) reports that 20% of mortgage denials in 2022 were due to credit score issues, while 15% stemmed from insufficient income documentation. Fannie Mae’s 2023 findings show that applicants who corrected credit errors and resubmitted applications saw a 50% approval rate within six months. For property-related denials, the National Association of Realtors notes that 30% of rejected buyers resolved valuation issues (e.g., updating appraisals or addressing code violations) and re-qualified. Meanwhile, FHA loans, which require just 3.5% down, accounted for 12% of all mortgages in 2023, per the U.S. Department of Housing and Urban Development, underscoring their role as viable alternatives. Proactive communication with lenders and structured financial adjustments significantly improve outcomes, as 60% of denied applicants achieve approval after addressing core issues systematically.