It can be heartbreaking and demoralizing: You found your dream home, but your request for a mortgage is denied.
Before you give up, there are some things you can do to get approved — “no” doesn’t always mean all is lost.
Homeownership can be a valuable long-term investment and wealth-building opportunity for you and future generations. But getting your foot in the door— actually buying that first home — can be tricky, especially for certain communities. In fact, Black and Hispanic customers actually get denied home loans almost twice as often as white customers.
If your loan application is denied, there are things you can do but you have to act fast.
Get top local stories in San Diego delivered to you every morning. Sign up for NBC San Diego's News Headlines newsletter.
If you want to save your loan, you’ll have as little as a day or two between the time your loan officer breaks the bad news and the bank sends a formal letter of denial.
Start by asking for a detailed explanation on why you were denied, which, by law, you are entitled to get. If you were denied because some information was missing or unverifiable, get it corrected as soon as possible.
By providing a letter explaining anything the lender may not be clear about, such as reasons for gaps in employment, along with supporting documentation, you could salvage your loan application.
Local
If you find you’re hitting dead ends, shopping around for a new mortgage might be your best bet, but do it right away. Every time your credit score gets “hard checked,” it’ll cost your score several points.
You’ll have 14 days (from the first day the original lender did a “hard check”) to shop around for a new mortgage without further hurting your credit score.
If you're looking for a new loan, a lender that participates in a Special Purpose Credit Program might help. This program allows the lender to specifically assist disadvantaged borrowers of color, women, people with disabilities and other underserved groups. You can find a bank offering an SPCP near you by visiting the National Fair Housing Alliance’s website.
And, finally, If you think your loan application was denied because of discrimination, you can file a complaint at the Department of Justice’s housing discrimination tip line at 800-669-9777 or clicking here.
