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So, you’ve been told “no” by a lender. First off, take a deep breath. I know how frustrating and discouraging it can feel to get that mortgage denial email or call. But here’s the truth: one “no” doesn’t mean your dream of owning a home is over.
As a realtor here in Palm Bay, I work with buyers every day who face roadblocks just like this. And time and time again, I’ve seen those roadblocks turn into stepping stones when the right strategy—and the right mortgage professional—is in place.
Let’s break down five of the most common reasons a mortgage might get denied and what you can do to turn that denial into an approval.
1. Your Credit Score Is Too Low
This is one of the most common reasons for a denial, but it’s also one of the easiest to fix over time.
✅ Quick Fixes:
- Request your free credit report at AnnualCreditReport.com
- Consult with a credit repair person before paying off any collections
- Reduce credit card balances to below 10% of the limit
- Avoid opening new lines of credit during this time
Real Story:
A First-Time Buyer came to me with a 580 credit score and felt like she’d never own a home. But after following a simple credit repair plan—paying off her smallest credit card and setting up autopay—she boosted her score by 50 points in just 3 months! I introduced her to a mortgage broker who got her approved shortly after.
2. Not Enough Income?
Sometimes, it’s not about what you make—it’s about how it’s presented or calculated.
✅ What You Can Do:
- Add a co-borrower like a spouse or parent
- Count income from side gigs, freelance work, or bonuses
- Lower monthly debt by paying off car loans or personal loans
Real Story:
Alex, a self-employed influencer, was initially denied because his income seemed too inconsistent. But I connected him with a lender who factored in his side hustle—and guess what? He’s now a homeowner.
3. Not Enough for a Down Payment?
Many buyers think they need 20% down to buy a home. That’s simply not true.
✅ Consider These Options:
- FHA loans (as little as 3.5% down)
- Conventional loans (some allow 3% down)
- State and local grants
- Gifted funds from family (just need documentation)
Real Story:
Amy didn’t think she had enough saved to make homeownership happen. But with a 3% down loan and a DPA that covered part of her downpayment costs, she made it work.
4. Debt-to-Income Ratio (DTI) Too High?
Your DTI measures how much of your income goes toward debt. If it’s too high, lenders get nervous.
✅ Here’s How to Lower It:
- Pay off smaller debts
- Refinance loans to reduce monthly payments
- Work with lenders that allow higher DTI ratios
Real Story:
Liam’s car payment was throwing off his DTI. We helped him refinance, cutting $200 off his monthly payment—and that made all the difference in getting his mortgage approved.
5. You’re Self-Employed
Self-employment doesn’t disqualify you—it just means you need the right lender.
✅ What Helps:
- Use bank statements or 1099s as proof of income
- Keep detailed records of business earnings
- Adjust how income is reported to strengthen your profile
You’re Closer to Homeownership Than You Think
A mortgage denial is not the end—it’s just one opinion. There are mortgage brokers and lenders in Palm Bay who specialize in creative, flexible solutions.
As your realtor, I can connect you with pros who know how to work with your unique situation.
Let’s turn that “no” into a “YES.”
📩 Reach out today if you’ve been denied a mortgage and want a second opinion—or just need someone to help guide you through your options.
