Denied a Mortgage? Don’t Be Discouraged—Get a Second Opinion Instead.

Steve Carter
Branch Manager | Mortgage Expert | Passionate Cook

I’m seeing way too many people give up on their home financing goals after a denial.

I’ve learned over the years the secret to achieving success with any goal is to never give up—and get a second opinion if you don’t get the answer you want.

During the past year, I’ve consulted with several people initially discouraged after being rejected for a home loan. With some diligent effort and smart planning, they got the home financing they deserved.

The following scenarios illustrate how I approach clients looking for a second chance at getting a mortgage:

Young First-Time Homebuyers with No Credit History

They just had their first baby and were excited about moving from renting to homeownership. Then they got denied on their first attempt with a lender and settled on being renters for a few more years.

I took a look at their situation, realized all they needed to do was a more credit history. This couple was proud of not having or using credit cards. While I commended them on their financial self-control, I shared how important it was to show the same discipline in making payments in their credit history.

A new credit card and a few monthly payments under their belt were all they needed for me to get them pre-approved for a loan.

Now they’re enthusiastically looking for their first home. And with a preapproval in their pocket (BTW, only 10% of home buyers carry a preapproval), they’re in the driver seat to negotiate a great deal with home sellers.

Homeowner Looking to Buy a Bigger Home for His Family

He got approved for a mortgage from another lender. But it wasn’t enough.

Unfortunately, they could only approve him for less than $200K, not nearly enough to buy the 5 bedroom home he wanted for his growing family.

After that discouraging news, he almost gave up. His real estate agent asked if I could look at his situation. With a bit of research, I realized the previous lender had totally missed part of his financial story.

We got him over $300K and he gratefully got the house he wanted for his family.

Credit Challenged Couple

Low credit score in the 500s put this couple in a box that most lenders didn’t want to deal with.
After being denied almost immediately by a smartphone app company, they decided that homeownership wasn’t in the cards for them.

A friend referred them to me sharing I specialized in challenging home financing situations.
While I could find them a lending solution with their low credit score—it really wasn’t in their best interest.

I realized they could get better terms—and save money in the long run—if they addressed some issues pointed out on their credit report. It’s amazing how quickly a credit score can increase by addressing a few action items.

They followed my advice and kept in touch with me on a monthly basis regarding their progress. Six months later, they easily got approved for a home loan with terms that will benefit them financially for many years.

Homebuyer with Complex Income Structure

A minister got denied a home loan a couple of times before reaching out to me.

Like the self-employed, contractors and commission-based salespeople, ministers have a complex—in the eyes of most lenders–income structure. Basically, it’s challenging to fully document their income.

Because many lenders approach home financing with a call-center mentality (volume vs. value), they don’t allow the time needed to solve challenging situations.

By taking the time to research and document his compensation, non-taxable income and allowances (such as car payments), I was able to get him approved for a home loan.

And today he’s blessed with a beautiful home he didn’t think he could get.

Lender Standards Typically Tougher Than Government Guidelines

While lenders use guidelines established by Fannie, Freddie, VA, FHA and the USDA to approve mortgage loans—many lenders may use their own tougher standards.

For example, government guidelines may require a borrower have six months of reserves while a lender might demand 12 months or even 24 months. Or, guidelines call for a 620 credit score and one lender’s standard is 680 while another is 720.

That’s why it’s important not to get too discouraged with being denied. See what another lender can do for you.

Loan Officer Experience & Personal Commitment Matters

In my 25+ years of experience, I’ve learned that personally taking time to understand the borrower’s situation…

• Their home financing goal
• Their real income and assets

…makes a world of difference in locating the home financing they deserve.

When I listen and understand my client’s story, it helps me research the right solution that aligns with their needs and desires. And it makes me their best advocate when I sell their story to the underwriters—who ultimately make the lending decisions.

That’s the advantage a true customer service approach has over lenders who rely on a computer algorithm to make quick lending decisions.

And it’s a approach that’s brought me a 100% success rate for the loans I submit for my clients.