Your Mortgage Was Declined: Here Is What to Do Next

Getting denied for a mortgage is frustrating — especially when you know you can afford the payment. But a denial from one lender is not a closed door. In most cases it is simply a mismatch between your scenario and that lender's specific guidelines.

The Most Common Decline Reasons

The four most frequent decline reasons are credit score below program minimums, debt-to-income ratio too high, income that cannot be fully documented through traditional channels, and property conditions or appraisal issues. Each of these has solutions — they just require working with the right lender and the right program.

What Lender Overlays Are

Every loan program has base guidelines set by Fannie Mae, Freddie Mac, FHA, or VA. Individual lenders add their own requirements on top — called overlays.

Example: FHA officially allows a minimum credit score of 580. Many lenders impose an overlay requiring 620 or 640. If you were declined for a 595 credit score on an FHA loan, the issue is not FHA — it is that specific lender's overlay. Another lender without that overlay might approve you.

A denial from one lender does not mean you do not qualify for financing.

Why Brokers Find Solutions Banks Cannot

A mortgage broker accesses dozens or hundreds of lenders — each with different guidelines, different overlays, and different program specializations. When one lender says no, a broker identifies which others have the flexibility to say yes.

At East Coast Mortgage, we work with over 200 lenders. When a conventional lender declines, we evaluate non-QM programs, DSCR loans, bank statement products, portfolio options, and specialty programs.

Submit your scenario and tell us what happened. We will evaluate your options and tell you exactly where you stand.