LESSON 19: WHAT IF I GET TURNED DOWN?
You've gotten all your ducks in a row, filled out your application
and thrown yourself at the mercy of the mortgage lending gods. But
what if they aren't happy and they send your application back with
a big red "DENIED" stamp on it?
In most cases, you're not completely out of luck.
You may be able to get a loan; it just might cost more and not be
mortgage you were hoping for. After all, mortgage lenders want
your business and most will come back with different mortgage options
that will fit your budget.
First, though, let's look at what you should do if your conventional
loan application is denied outright:
Find out why. The lender
has 30 days from your submission of a completed application to explain
in writing why the loan was turned down. You will receive an "adverse
action notice" stating a specific reason for the denial.
The notice will also tell you which federal agency to contact if
you think the lender or mortgage broker has illegally discriminated
against you. See
Request a second opinion.
Some lenders have a second level of review for loans. You might
be able to qualify if you can convince the lender that there was,
say, a legitimate reason for that bankruptcy filing two years ago
(for example, your wife was in the hospital for several months and
the medical bills ruined your finances).
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