Mortgage Help   Mortgage Rates Real Estate Credit Foreclosure Tax Mortgage Rates  Mortgage Basics Chapter 1: How much house can you afford? Homeownership Should You Buy or Rent Summary   Chapter 2: Adjustable-rate mortgages ARM and a fixed-rate mortgage Fixed-rate mortgages Understanding the key elements Which type of lender is right for you? Other types of mortgages Subprime Summary   Chapter 3: Your credit score Down Payment How lenders set rates Low down payments Mortgage insurance Your mortgage payment Mortgage Points Summary   Chapter 4: The good faith estimate Inspection and Insurance Necessary paperwork for a buyer Other lender paperwork Paperwork and fees Prequalification and preapproval Special circumstances Summary   Chapter 5: Ten questions to ask Turned down for a mortgage Underwriting What lenders ask Summary   Chapter 6:  Understanding the closing process Escrow Summary   Chapter 7: When your mortgage is sold Avoiding foreclosure Paying ahead Payment changes Refinancing Removing mortgage insurance Summary Turned down for a mortgage The number one fear of a first-time home buyer is being turned down for a mortgage. It's perfectly normal to worry about rejection, but the chances of it happening are low. The popularity of preapprovals and the various ways lenders can adjust loan terms have lowered rejection rates for borrowers. Some borrowers will get denied for a mortgage. If you are, you should: 1. Find out why Your lender has 30 days from the date of your mortgage application to explain in writing why your loan was denied. This explanation is called an adverse action notice. It must state a specific reason for the denial. It will also tell you what federal agency you should contact if you feel as if you are a victim of discrimination. The most common reasons for denial are easily corrected give a little time. They are: -insufficient down payment amount -excessive debt -poor credit history You can always reapply for a mortgage once you have saved more money, paid down your outstanding debts or raised your credit score by paying your bills on time. 2. Request a second opinion Many lenders offer a second level of review for mortgage loans. This gives you an opportunity to plead your case. You may qualify if you can convince the secondary loan reviewer that your credit history was affected by circumstances out of your control, such as unexpected hospital bills or identity theft. 3. Keep trying Just because you are rejected by one lender, doesn't mean that no one will approve your mortgage. Banks and mortgage lenders have different underwriting standards. There is a good chance that you will find one that is right for your financial status.