| Sometimes it’s not a matter
of just getting turned down. It’s just that
the loan you applied for may not be the loan you
are ultimately approved for. The mortgage lender
may offer a different program or a counter offer.
Or, the lender may grant the loan, but with certain
conditions to be met prior to closing.
What to do if the loan is denied:
• 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.
• Many of the reasons for denial can be
corrected over time. These may include insufficient
money for a down payment, excessive debt or a
poor credit history. Once your financial situation
or credit profile has improved you can apply again
for a loan.
• If a poor credit history was the reason
you were denied the loan, you are entitled to
a free copy of your credit report. You also have
the right to dispute the accuracy or completeness
of any information in your credit report. If you
dispute any information, the credit reporting
agency that prepared the report must investigate
free of charge and notify you with the results
of the investigation. For more information, see
the bankrate.com special report, Your Credit:
The basics.
• Some lenders have a second level of review
for loans, and you might request a second opinion.
• Keep shopping. If you’ve been turned
down once, don’t automatically be discouraged.
Banks and mortgage companies set different criteria
for mortgage approval based on their business
objectives. Another lender may be the right match
for you.
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