Why Do Underwriters Deny Mortgage Loans?
Some situations that can cause your mortgage application to be rejected include getting laid off or recent job changes, especially if you switch to a different field. If you did change jobs recently, it can help to include a letter from your employer verifying your position and salary. Your income sources also matter. If a good chunk of your earnings come from commissions, bonuses or other sources outside of a regular salary, it could signal to the underwriter that your income is unstable and they might require a longer period of proof of income. That could also lead to your mortgage application being denied. No Paper Trail  When it comes to your income, assets and down payment funds, underwriters expect to see detailed records of where the money came from. For example, youll need to provide W-2s from the last two to three years and pay stubs from at least the past 30 days that prove youre employed and verify what you declared on your application. You will also need statements that show your bank account and investment balances. If you were gifted some or all of the money for your down payment, youll need a gift letter that explains where the funds came from and confirms it was indeed a gift, not a loan (which isnt allowed). Low Appraisal