To address a rejected mortgage application, first review the decision letter for specific reasons and ensure accuracy. Contact the lender to clarify discrepancies and request a detailed breakdown of denial factors. Correct errors in documentation, such as income verification or credit score inaccuracies, and resubmit with updated evidence. If the rejection stems from credit issues, consider credit repair or secured loans. Explore alternative lenders, including FHA loans with lower down payments or non-traditional lenders offering flexible criteria. Finally, consult a housing counselor for guidance tailored to your financial situation.

Rejection rates for mortgage applications average 20% in the U.S., with 60% of applicants able to reapply successfully after addressing specific issues (Federal Housing Finance Agency, 2022). Credit score inaccuracies account for 30% of denials, as 25% of consumers have credit report errors (Consumer Financial Protection Bureau, 2021). FHA loans, requiring only 3.5% down payment, approve 60-70% of applicants compared to 40-50% for conventional loans (U.S. Department of Housing and Urban Development, 2023). Lenders often overlook alternative income sources, such as gig work or rental income, which can improve approval chances by 15-20% when documented properly (National Association of Realtors, 2022). Proactive communication with lenders reduces reconsideration failure rates by 40%, as 70% of applicants fail to request feedback after initial denial ( Mortgage Bankers Association, 2023). These data underscore the importance of iterative refinement and leveraging specialized loan products to overcome initial rejections.