Lending such large amounts of money is a risky business for banks, and that money isn't handed over to just anyone. If your home ownership dreams have been rudely awakened by loan officers denying your application, it's time to take control of your situation and learn what you can do to turn that rejection into an approval.
What Are Your Options?
Everyone's financial situation is unique and different. With that in mind, here are six different options for making your homeownership dreams a reality.
Get a Co-signer
If your income isn't high enough to qualify for the loan you need and if you can find a cosigner with enough disposable income, part of that person's income can be considered toward your loan amount regardless of whether the person will actually be living with you or helping you pay the bill.
Sometimes conditions in the economy, the housing market or the lending business make lenders less generous with loans. If you're in a climate where everyone is panicking, then it may be best to wait things out. When conditions improve, lenders may become more accommodating to your needs and situation.
Set Your Sights on a Less-Expensive Property
If you can't qualify for the amount of mortgage you need and you aren't willing to wait, switching to a condo or townhouse instead of a house, accepting fewer bedrooms or bathrooms, or moving to a less attractive or more distant neighborhood may give you more options.
Ask the Lender for an Exception
Believe it or not, it is possible to ask the lender to send your file to someone else within the company for a second opinion on a rejected loan application. In asking for an exception, you'll need to have a very good reason, and you'll need to write a carefully worded letter defending your case. Your letter should avoid excuses and sob stories and focus only on the facts.
Try a Different Lender or Mortgage Broker
Sometimes one lender will say no while another will say yes. If the first lender you approach rejects you, there's no reason not to try out a few other options. If every lender rejects you for the same reason, though, you'll know that it's not the lender that's the problem, it's your financial situation. Your only choice at this point is to fix the problem.
To go from a rejected application to preapproved loan amount, it's important to know what lenders are looking for from you. If you've been turned down for a mortgage, make sure to ask the lender plenty of questions about things you could do in your specific situation to make yourself a more attractive loan candidate. With time, patience, hard work and a little luck, you should be able to turn the situation around and become a residential property owner.