Mortgage Loan Denial

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Mortgage Loan Denial

First time homebuyers face many scares and experience many difficulties throughout the home buying process. One of these complications lies with getting accepted for the mortgage loan. Not only is it a vital part of the home buying process but also raises the question, what do I do now? Thankfully, due to the rising popularity of pre-approval, mortgage lenders can adjust loan terms to suit the needs of you and them, the odds of actually getting denied for a mortgage loan are very small.

In the slim chance you do get denied we come back to the question what do I do now? Here are a couple of things you need to do immediately after.

First, Find out what exactly happened. Ask your lender why you were denied. By law your lender is required to explain in writing the reason why your mortgage loan was denied in 30 days or less. This is called an adverse action notice which must state a specific reason for denial and will inform you of what federal agency to contact if you think you were in any way discriminated by the mortgage broker. Usually, the three most common reasons for denial can all be fixed in time. They are insufficient down payment, raised your credit score by diligently paying your bills on time for a while, and excessive debt and poor credit history. Once the issue at hand is solved you can reapply.

Second, some lenders offer a second level of review for mortgage loans in which you could plead your case. Requesting a second opinion may get you qualified depending if you can convince the secondary loan reviewer that your credit history was marred by an isolated cataclysmic incident.

Written by Todd Moeller, 714-404-9540 todd@theocexperts.com – Unique, open and caring specializing in helping people find good values and good homes in Orange County. Visit Todd’s website here.

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