Consumer Reports, May 11, 2023, What to Do if You Are Denied a Mortgage
Incomplete or unverifiable information is another primary reason for mortgage loan denials, according to a 2020 analysis from the National Community Reinvestment Coalition, a national organization of community groups. Besides paystubs, tax returns, and W-2 income statements from your employer, lenders may look for verification of where your down payment is coming from, for example. Is it a gift from a family member, or a withdrawal from a retirement account? Providing a letter explaining the source, or anything else that the lender may not be clear about, such as reasons for gaps in employment along with supporting documentation, could salvage your loan application.