There are many different reasons why a potential borrower could be turned down for a mortgage loan. But it usually comes down to one of four things. Here are the four most common reasons people have their loan applications rejected by lenders:
- The borrower's credit score is too low.
- The borrower has too much debt.
- They borrower is asking for too much money, relative to income.
- The borrower lacks a down payment.
Some of these things tend to overlap. For example, having too much debt relative to your income (item #2) can actually lower your credit score (item #1).
