Denied for Mortgage Insurance? What to Do Next
When applying for mortgage insurance, the pressure is on to get the right insurance coverage for your homeownership needs. When denied the insurance you were hoping to get in 2022, you may be discouraged to try again or even move forward with your mortgaging process. Keep reading for some key steps to take after you’ve been denied mortgage insurance.
Where Did I Go Wrong?
The first step to take after you’ve been denied mortgage insurance is to self-reflect. Where did I go wrong? On what grounds was I denied this insurance plan? Taking the time to understand why your mortgage insurance application was denied is the first step to getting your home buying process back on track and achieving your mortgage goals in 2022.
You should have received a denial letter upon your mortgage insurance rejection. Make sure to read this in its entirety and note the reason for your lender’s decision of denial. The letter itself should list the reason directly, but if not, do not be afraid to contact your lender and ask them for a bit more reasoning. Your lender is legally required to tell you why your mortgage application was denied.
Common Reasons for Denial
According to Experian, most mortgage denials are because of poor credit, insufficient income, or an excessive debt-to-income ratio. When applying for mortgage insurance, the decision comes down to financial stability and reliability, and lenders are looking at these factors first when analyzing mortgage insurance qualifications.
It's important to have a clear view of your financial history, status, credit score, and other financial reports before applying for mortgage insurance. Working to stabilize your financial stature is a great first step to reassessing your mortgage insurance goals after being denied. Fixing your insurance qualification status starts with your financials!
Your Next Application
If you are denied mortgage insurance, it’s not a good idea to apply to several other programs/places right away. This creates multiple hard inquiries on your credit report and can actually hurt your financial stature. It's a better idea to take some time and investigate any issues with your credit, income, or debts and address them before applying for another insurance program and turning to another lender.
Utilize checklists and online calculators to help ensure that you are prepared for your next mortgage insurance application in 2022. Do the research and catch the bad break to get your mortgage process back on track and achieve your home goals this year! When you are ready to try again after being denied, look for a lender that you can build a relationship with and who has access to a wide range of mortgage options to find the right fit for you and your homeownership needs!
At Equity Mortgage, we work with a variety of clients with varying degrees of mortgage needs. We offer our clients alternative options to their current loan programs with our wide range of mortgage products and flexible lending practices.
Experience fast, professional service for coronavirus mortgaging today and into the future. Contact us for more info or give us a call at 1-800-332-9221.
* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.