If you cannot secure a mortgage to purchase a home, you may explore alternative housing solutions such as renting, rent-to-own agreements, or government-subsidized programs. Improving your credit score, increasing savings for a larger down payment, or seeking co-borrowers with stronger financial histories could also help. Denial often stems from factors like insufficient income, poor credit, or high debt-to-income ratios, which may lead to extended housing insecurity or reliance on pricier rental markets.

Mortgage denial typically occurs when lenders deem applicants high-risk due to financial instability. According to the Federal Reserve’s 2023 Consumer Credit Report, 25% of mortgage applicants were denied due to credit scores below 580, while 30% faced rejection for insufficient income or high debt-to-income ratios. The Consumer Financial Protection Bureau (CFPB) notes that 40% of denied applicants cited credit score issues as the primary cause. Government programs like Federal Housing Administration (FHA) loans or Veterans Affairs (VA) loans offer more flexible requirements, with FHA loans requiring a 3.5% down payment and VA loans allowing zero-down payments for eligible veterans. Rent-to-own agreements, though less common, enable potential buyers to gradually build equity while leasing. However, these alternatives often involve higher costs or complex terms. For instance, a 2022 study by the Urban Institute found that rent-to-own homes typically charge 5-10% more than market rates. Financial advisors recommend consulting housing counselors or non-profit organizations to navigate options and avoid predatory practices. Addressing underlying financial barriers, such as debt management or income enhancement, remains critical for future homeownership.