Common Money Mistakes That Can Lead To A Mortgage Denial And How To Avoid Them

Reasons For Mortgage Denial
Reasons For Mortgage Denial

Buying a home is one of the most significant investments that most people make in their lives. However, getting a mortgage and not getting approved can be frustrating and stressful. Hence, it is essential to be mindful of common money mistakes that can lead to a mortgage denial.

Insufficient Credit Score

One of the most common reasons for mortgage denial is an insufficient credit score. Before applying for a mortgage, ensure that you have a good credit score by reviewing your credit report. Pay off any outstanding debts and avoid applying for new credit cards, as multiple credit inquiries can negatively impact your credit score.

Insufficient Down Payment

Many lenders require a down payment of at least 20% of the purchase price to secure a mortgage. If you don’t have the funds for a down payment, you may need to save up or consider alternative financing options. Keep in mind that some lenders may also require that you have cash reserves or a certain level of income before they approve your mortgage.

Insufficient Income

Lenders evaluate your income to determine your ability to repay the mortgage. If your income is insufficient, you may not be approved for a mortgage. Before applying for a mortgage, ensure that your income is stable and sufficient to cover your monthly mortgage payments.

Debt-To-Income Ratio

Your debt-to-income ratio (DTI) is another crucial factor that lenders consider when evaluating your mortgage application. If your DTI is too high, you may be denied a mortgage. To avoid this, pay off any outstanding debts and avoid taking on new debt before applying for a mortgage.

Employment History

Lenders typically prefer applicants with a stable employment history. If you have recently changed jobs or have gaps in your employment history, it may be more challenging to get approved for a mortgage. Make sure you have a stable job and employment history before applying for a mortgage.

Incomplete Documentation

Submitting incomplete documentation is a common mistake that can delay or even lead to mortgage denial. Before submitting your application, ensure that you have all the necessary documentation, such as tax returns, pay stubs, and bank statements.


A mortgage not getting approved can be a frustrating experience, especially in Fitchburg, where realty properties are on the rise. To avoid this mistake, it is essential to be mindful of common money mistakes that can lead to mortgage denial. These include insufficient credit score, down payment, income, debt-to-income ratio, employment history, and incomplete documentation. By avoiding these mistakes and being prepared, you can increase your chances of getting approved for a mortgage and finally owning your dream home.