Why Was My Home Loan Denied

Change of Jobs

One of the most common reasons a mortgage loan is denied is due to a change in employment. Most financial institutions have specific requirements for length and consistency of your work.  A change in employment may be acceptable in some cases if it’s in a similar field, but it is reviewed on a case by case situation. It is essential that a buyer who is pre-approved asks his mortgage consultant about a possible employment change before making a move. In most cases, a professional mortgage consultant will be able to predict whether there will be an issue with ultimately obtaining the mortgage loan or not.

Negative Item or Additional Debt On Credit Report

While having a perfect credit is not a necessary "must-have" item to be approved by your home lender, there are specific credit score guidelines that each type of mortgage lender will require. Having a negative issue showing up on your credit report, after being pre-approved can be a substantial reason for your loan to be denied. It’s imperative that a buyer monitors his credit score after they are pre-approved and have a clear understanding of how credit scores changes can impact a home loan process. Maintaining a close watch on your credit score during the loan process is vital for a smooth and comfortable process for you and your home mortgage lender.

Another popular reason a mortgage loan is denied after being pre-approved is that a buyer takes on additional debt. Something called Debt-To-Income Ratio is one tool commonly used by all mortgage lenders, which helps them determine how much debt a buyer can afford to compare to his total income. Make sure you ask questions before you acquire any new debt that can severely impact your credit score and consequently the outcome of your home loan process.

Talk To Your Mortgage Specialist

If you have already embarked in the home loan process or are looking for a home mortgage loan, be sure to find a mortgage specialist that will help and educate you in every aspect of your home buying process. Be inquisitive and do not be afraid to ask, “How can I ensure my mortgage is not denied?" A professional mortgage specialist will be willing to help you with all this information, even if you have not yet made your final decision.

For any further questions, please contact us and let us assist you with any need you may have in the home buying process.


American Mortgage Resource Inc.

2 Winter St Suite #202, Waltham - MA - 02451
Phone: 1-617-972-8588
Massachusetts LIC # MB22431 
New Hampshire LIC# 22358-MBR

Florida LIC# LO-58342

Member of the Cambridge Chamber of Commerce
Member of Massachusetts Mortgage Bankers Association
Member of Massachusetts Mortgage Association


FHA & VA Approved | Residential and Commercial Lending | Reverse Mortgages Available | Boston and Massachusetts