California Mortgage Application Declined? We Might Be Able to Help

Have you applied for a mortgage loan in California in the past, only to have your application denied by the lender? If so, you might not be entirely out of options.

We have been able to approve borrowers who were turned down for mortgage loans in the past. As a mortgage broker, we work with a number of different lenders and are able to offer a wide range of financing options. We also know how to structure loans correctly, to increase the chance for underwriter approval.

If you’ve been turned down for a California mortgage loan in the past, keep reading to find out how we might be able to help you…

Common Reasons Why Mortgage Loans Get Declined

Mortgage lending is a complex process that involves a lot of paperwork and variables. So there are several reasons why a home loan in California could be declined. But there are also exceptions and workarounds for some of these situations, and we’ll cover them below.

Here are some of the most common reasons for “rejection”:

Poor credit score

Banks and mortgage lenders review credit scores to see how you have borrowed and repaid money in the past. A low credit score can indicate that a borrower has a history of missed payments or defaults. This makes the person a bigger risk from the lender’s perspective, and it might cause them to decline the mortgage application.

Insufficient income

Mortgage lenders want to ensure that a borrower has enough income to cover the monthly mortgage payments, in addition to all other recurring debts. If the lender feels that the borrower has insufficient income for these purposes, they might decline the loan.

High debt-to-income ratio

This ratio shows how much of a person’s income is used to cover their various debts. For example, a 50% “DTI” ratio shows that half of the income goes toward debts. If a lender feels that a borrower would be taking on too much additional debt with a home loan, they might deny the mortgage application.

Employment history

Employment requirements can vary from one mortgage loan program to the next, and also from lender to lender. In general, mortgage companies prefer to see at least two years of employment with the same employer or within the same line of work. Borrowers with “gaps” in their employment can have a harder time getting approved.

Inadequate down payment

Most mortgage programs require some kind of upfront investment, in the form of a down payment. If a borrower does not have enough money to cover the down payment for a specific type of loan, the lender might decline the application.

Property appraisal issues

Banks and mortgage lenders in California usually require an appraisal for the home being purchased. The purpose is to determine the current market value of the property. If the appraisal comes in lower than expected, and the borrower cannot make up the difference with a larger down payment, the loan might be turned down.

These are not the only reasons why a mortgage loan application in California might be declined. But they are some of the most common scenarios.

The good news is that there are workarounds and exceptions for many of these situations. So, even if you have been turned down for a home loan in California in the past, you might still be a good candidate for financing.

How a California Mortgage Broker Can Help

Bridgepoint Funding is a mortgage broker, rather than a traditional bank or mortgage company. A broker is a kind of intermediary that matches individual borrowers with specific home loan products or programs.

Brokers typically work with a variety of lenders, instead of just one. This gives them access to a broader range of financing options, allowing the broker to match each client with the best product for their particular needs.

As a California mortgage broker, we are able to offer home loan options for people who have been declined in the past. Sometimes, all it takes is a different set of eyes to find a workable solution.

We take pride in being proactive and thorough when considering loan applications. We review all aspects of a client’s financial situation, to determine the best way to structure the loan. This can increase the chance for mortgage approval, even for those California home buyers who’ve had their loans denied in the past.

Structuring Loans for Underwriting Success

In some cases, a home loan application can be restructured in a way that improves the chance for underwriting success and approval.

For example, if a loan officer fails to include overtime or bonus money as income, it can hurt the borrower’s chance of getting approved. But by counting these factors toward the overall income, it could remedy the situation and pave the way for mortgage approval.

That’s just one example of how proper loan structuring can increase the chance for success. And this is what we strive for in our business, with each individual client.

• We consider the big picture, instead of focusing on individual factors.
• We look for exceptions that can help get a client approved.
• We leave no stone unturned in the quest for loan approval and funding.

So, if you’ve been turned down for a mortgage loan in California in the past, we encourage you to contact our staff. We can’t help everyone who has been denied in the past. But we do have a pretty good success rate, when it comes to turning previous denials into approvals!