Denied a Mortgage? Don't Get Mad, Get Approved

NEW YORK (MainStreet) — Home mortgage applications were down by 6.3% last week, according to the Mortgage Bankers Association, and mortgage refinancing applications were down even further, sliding by 8%.

"Following the Federal Reserve's taper announcement, mortgage application volume dropped again last week, with rates increasing and refinance application volume falling to its lowest levels since November 2008," says Mike Frantantoni, the MBA's vice-president of research."Purchase application volume were weak too, continuing to run more than 10% below last year's pace."

It could mean a bigger window of opportunity for homebuyers or homeowners looking to refinance.

But what if you apply for a new mortgage and get denied? After all, there is no guarantee you'll get approved your first trip to the plate.

The important thing? Just keep swinging, mortgage experts say.

"Different lenders have different standards," said Ray Brousseau, executive vice president with Carrington Mortgage Services, a Santa Ana, Calif., mortgage lender. "Where one lender looks at a loan file and sees a red flag, we might see green. For this reason, it's important not to take a loan rejection personally or consider it a black mark. Just regroup and speak with a replacement lender who can get the job done."

Brousseau offers some pointers for mortgage applicants coming out of a denial:

First, you're more ready than you think. Go ahead and jump right back into the mortgage market — you have everything you need to try again.

"When you submitted your first loan application, it took some time to pull together the necessary documents and forms," Brousseau says. "Now you have those materials in hand, and you have a current and usable appraisal that a replacement lender can consider. The result is that you may be able to breeze through the underwriting process with a second lender a lot faster and with a lot less hassle than the first."

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