Depending on the reason you were denied, we have a list of next steps you can take.
Improve your credit score: The best way to improve your credit score is to make on-time payments. Try not to take on any more large debts and try to pay off high-interest debt ASAP. Have documentation: Provide your lender with proof of income and employment if you recently changed jobs, are about to change jobs or are unemployed and receive unemployment compensation. If you’re changing jobs, you’ll have a better chance of being approved if the job that you’re getting is in the same field as your current job. Lenders want to be able to determine a likelihood of employment stability, which may not be as guaranteed if you’re making a career switch. Lower your DTI: Pay off more debt so your DTI is lower than what’s required for the loan you want. Lowering your DTI will also help boost your credit score. Figure out your financing: Choose a different property that’s easier to finance or easier to save for. With a larger down payment, you’ll borrow less money and lower your LTV. A Fannie Mae HomeReady loan or Freddie Mac Home Possible loan may be a good option to get a mortgage for 3% down. You can get a loan for 3.5% down through the FHA. Save money: Save more money for closing costs and home maintenance. Know your rights: The Fair Housing Act was put into place to protect people from discrimination when renting or buying a home. The guidelines will help you determine if you’ve been unfairly discriminated against.