Denied a home loan? Steps you can take to avoid it

Good credit demonstrates responsible money management and gives you more purchasing power

StatePoint Media - You have researched the best areas to live within your budget. Spent countless hours visiting homes or viewing them online and talked to seasoned homeowners to ensure you haven't missed anything. You finally make an offer on your dream home that is accepted, and then the worst happens, the bank won't okay your loan.

If you dream of homeownership, having your mortgage application denied can be devastating. If this does happen to you, it’s important to remember that you’re not alone. Thirteen percent of all purchase mortgage applications -- a total of nearly 650,000 -- were denied in 2020, according to federal government data.

Before quickly reapplying for a loan, it’s important to first understand the reasons your loan was denied. The lender is required to disclose that information to you within 30 days of its decision. You can also call your lender for further explanation. Having this knowledge will help you work toward building your eligibility for a mortgage.

Illustration: Clker-Free-Vector-Images/Pixabay

In some instances, the situation involves a quick fix, such as providing missing or incomplete documentation. However, if the reasons cited for your application denial involve down payment cost, a low credit score, an adverse credit history or a high debt-to-income ratio, here are six steps you can take toward recovery:

1. Consult a Housing Counselor. Consider speaking to a community-based credit counselor or a HUD-certified housing counselor. They can help you create a plan to increase your savings, decrease your debt, improve your credit, access down payment assistance or take advantage of first-time homebuyer programs.

2. Improve Your Credit. In a 2022 Freddie Mac survey of consumers denied a mortgage application in the past four years, three in five cited debt or credit issues as reasons given for their initial denial. If this describes you, take time to improve your credit profile before applying for another loan. Good credit demonstrates responsible money management and gives you more purchasing power, opening doors to better loan terms and products. Visit creditsmart.freddiemac.com to access Freddie Mac’s CreditSmart suite of free financial education resources that can help you understand the fundamentals of credit and prepare you for homeownership.

3. Pay Down Debt. In the application process, lenders will look at your recurring monthly debts, such as car payments, student loans and credit card loans. By lowering or paying down monthly debts, you can build a positive credit history and lower your debt-to-income ratio. Not sure where to start? Tackle your debt with the highest interest rate first.

4. Obtain Gift Funds. If you’re short on money for your down payment, you may be able to use gift funds from a family member to decrease the amount you need to borrow.

5. Find a Co-Signer. A co-signer applies for the loan with you, agreeing to take responsibility for the loan should you default. The co-signer’s credit, income and debts will be evaluated to make sure they can assume payments if necessary. In addition to ensuring your co-signer has good credit, you should make sure they are aware of this responsibility and have sufficient income to cover the payment.

6. Look for a Lower-Cost Home. Remember, you should only borrow an amount you feel comfortable repaying. You may need to look for a lower-cost home than you’re financially prepared to purchase and maintain.

For more information and additional resources, visit myhome.freddiemac.com.

If your home loan application is denied, don’t panic. There are ways to build your eligibility so that next time, your mortgage application is more likely to be approved.

Taking care of yourself during the holidays, steps you can take

Photo: Hansuan Fabregas/Pixabay

StatePoint Media - With seasonal stressors like end-of-year work deadlines, gift shopping and hosting potentially weighing on you, plus all those extra sweets and indulgent foods to nibble on, the holiday season may be the happiest time of year, but it’s not always the healthiest. Here’s how to take better care of yourself to feel your best this holiday season.

Protect Your Skin
You may be aware that the more free radicals you have in your body, the more skin damage can accumulate over time. But did you know that exposure can be particularly high during the holiday season? There are a few reasons for this. One is that cooler temperatures are linked to sugar cravings, making sweet treats especially hard to resist at a time of year when there are so many to choose from. Increased sugar intake can boost the production of advanced glycation end products, and ultimately unwanted free radicals. In general, diets high in fat, sugar, and processed foods can contribute to free radical production, as can stress.

Fortunately, you can take steps to protect your skin from the inside out during the holidays and beyond. Fernblock PLE (Polypodium leucotomos extract), the natural antioxidant in the dietary supplement Heliocare Daily Use Antioxidant Formula, can help neutralize free radicals and the damage they cause. Dermatologist-recommended, Heliocare aids in eliminating free radicals to help maintain younger-looking, more resilient skin.

“Along with the cheer of the season comes skin hazards,” says New York-based dermatologist, Rachel Nazarian, MD. “But the holiday season is the perfect time to gift your skin additional protection from the damaging effects of free radicals. You can do this by incorporating a supplement like Heliocare into your routine in addition to using a topical broad spectrum sunscreen.”

To learn more, visit heliocare.com. (These statements have not been evaluated by the Food and Drug Administration. Heliocare is not intended to diagnose, treat, cure or prevent any disease.)

Move Daily
Be sure to take time for yourself each day to receive the combined physical and mental health benefits of movement. Head outdoors for a morning or afternoon walk to get some fresh air, improved blood circulation and some mood-boosting sunlight during the short, dark days of winter. To promote agility, flexibility and relaxation, take a few minutes to unwind with some meditation or gentle yoga.

Practice Healthy Habits
Holiday office parties and family gatherings often involve indulging in the kinds of food and drink that can leave you feeling more dehydrated, bloated and fatigued than you might normally. Counteract these effects by adopting healthy habits now that you can carry into the new year. Drink plenty of water each day, and incorporate decaffeinated green tea, coconut water or smoothies into your routine for added electrolytes. Likewise, get high-quality sleep each night. It’s especially important to do so if you’re burning the candle at both ends. For better shut-eye, avoid caffeine and blue light exposure before bedtime, and keep your bedroom temperature comfortable and consistent.

While it can be hard to set aside time in your schedule when there’s so much to do, a bit of daily self-care is sure to have a restorative effect that helps you refresh, reset and be more focused.