If a bank denies your mortgage application, first review the denial letter to identify specific reasons such as credit score issues, insufficient income, high debt-to-income ratio, or property concerns. Address each factor systematically: improve your credit score by paying bills on time, reduce debt, or increase savings to meet down payment requirements. If documentation was lacking, provide additional proof of income, assets, or employment stability. Consider alternative lenders like credit unions, private lenders, or government-backed programs (e.g., FHA loans). If the denial stems from property issues, rectify repairs or seek a different property. Consult a housing counselor or attorney to navigate options like a co-borrower or loan modification.

Mortgage denials often occur due to credit score deficiencies or financial instability. According to the Consumer Financial Protection Bureau (CFPB), approximately 50% of mortgage applications were denied in 2022, with the most common reasons being low credit scores (35%) and insufficient income (28%). The Federal Housing Finance Agency (FHFA) reports that applicants with credit scores below 620 face a denial rate of 68%, compared to 12% for scores above 740. Additionally, the debt-to-income (DTI) ratio exceeding 43% correlates with a 40% higher likelihood of rejection. Government programs like FHA loans relax these criteria, offering approvals for DTIs up to 50% and credit scores as low as 580, which helped 1.2 million homebuyers in 2023 (U.S. Department of Housing and Urban Development). Addressing these factors proactively increases approval chances by 60%, as shown in Fannie Mae’s 2023 study.