Five Crazy Reasons You Might Get Turned Down for a Mortgage

By Irma Sebastiano August 08 2018 Comments

Imagine. You are good with your money. You have a good job. And somehow, your mortgage application still ended up in the “reject” pile. Sadly, this situation is more common than you might think. So if you got turned down for a mortgage – and it just doesn’t seem to make any sense – here are five crazy reasons you may have been turned down.


1. You’re not using your credit cards enough.

But wait, you think. Debt is bad right? Well yes, too much debt can certainly be bad, but debt can also be an important tool to help you build your credit history. If you never use your credit cards, lenders have no idea about how reliable you are for paying off your debt. So they won’t take a chance on giving you a mortgage.

2. You just got a new credit card.

Hold on, you just told me that using credit was important and now you’re telling me that getting a new credit card is bad? Yep. Getting a new credit card can temporarily put a dent in your credit score, so don’t apply for a new one if you are about to apply for a mortgage.

3. You were late on a bill.

This reason actually makes a bit more sense. When you are late making payments on your credit cards, car payments etc. it will affect your credit. Make sure that if you are looking to become a homeowner that you are keeping up with your financial obligations.

Being thirty days late on a payment can get you a black mark but being ninety days late or more is quite serious for lenders.

4. You got a new job.

Lenders like to see that you have steady employment. Changing jobs – even if your new job has better pay – can be a red flag for lenders. If you want to get a mortgage but are considering changing jobs, it is best to wait until the final paperwork is done before you leave your current employer.

5. You lied on your mortgage application

While it can be tempting to exaggerate you income on your mortgage application, don’t do it. This is called mortgage fraud and it is a crime. If you get caught lying on your application, chances are that you are going to be turned down.

What to do if you have been turned down for a mortgage

If you have been turned down for a mortgage, stay calm. It is not the end of the world and it is rarely the end of your chances to become a homeowner. Arrange a meeting with your mortgage broker to go over the details of why your application got rejected. And then come up with a plan to either correct what went wrong or to make a mortgage application with an alternative lender who is willing to look at the bigger picture.
Have you been turned down for a mortgage for one of the reasons above? Contact me today. I would be happy to discuss your options with you.

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4725 Dorchester Road, Unit B4, ON. L2E 0A8 irmasebastiano@rmabroker.ca 1 - (905) 321-9396
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