The Most Common Reasons Why You Can Be Denied For A Home Mortgage Loan

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Hi there, my name is Becky Suedel. I am excited to share my knowledge about loans and financing on this site. The loan process vets applicants to confirm that they have the means to pay back the total amount borrowed plus fees and other charges. During this time, applicants must produce proof of income and other documents to allow the loan processors to complete the application process. On this site, I hope to help prepare my readers for the loan application process. You can read my content daily to learn about how to qualify for a home or car loan in record time.

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The Most Common Reasons Why You Can Be Denied For A Home Mortgage Loan

22 May 2019
 Categories: , Blog


If your dream is to buy a home, it is important to research home buying requirements as soon as possible. Buying a home is a big purchase, and as such, lenders carefully evaluate your application when deciding whether to approve or deny you. Taking the time to learn what lenders look for, and the reasons why you can be denied will help you work toward fulfilling the requirements that are needed to purchase your home. Here are three common reasons why you can be denied for a home mortgage loan. 

Your Credit Score is Too Low

One of the most common reasons why you can be denied for a home mortgage loan is because your credit score is too low. There are different types of loans out there, and each loan has its own unique requirements. While you may be able to find a loan that will work with you if you have a low credit score, most conventional loans require you to have a credit score of at least 620 or higher. If you have a low credit score, it can be beneficial to work on bringing your score up before applying for a home mortgage. Not only will you increase your odds of being approved, but you may also get a lower interest rate. 

You Don't Have Enough Money for a Down Payment

Another common reason why you can be denied for a home mortgage is that you do not have enough money for a down payment. Most conventional lenders require you to put down about five percent of the purchase price of your home. Some lenders may require more than that based on your credit score. Start saving now to ensure you have enough money to cover your down payment and closing costs. 

Your Employment History is Erratic or Can't Be Verified

The final common reason why you can be denied for a home mortgage loan is that your employment history is erratic or cannot be verified. Lenders want to see that you have a stable work and verifiable work history. The length of time that is looked at varies from one lender to another, but most want to see at least six to 24 months of stable, steady, and verifiable employment. 

Lenders take their time and pick apart your home mortgage loan application because they want to ensure you can afford to pay back the money that they are lending you. Learning what is required of you prior to applying for a home mortgage loan can help you improve your credit score, save up a sufficient amount of money, and/or establish a verifiable employment history.