With underwriting regulations so strict and stringent these days, it is not uncommon for an underwriter to reject your loan.  If this happens, the important thing is to not panic – you do have options!

Scenario 1 – Your work history is a little sketchy. Hopefully your loan officer will be upfront with you and tell you this might be an issue. Solution: have a parent ready to co-sign with you just to make your file stronger. You can also start calling other lenders to see if they can get you a loan without it being a problem.

Scenario 2 – The property doesn’t meet loan standards. If the property is zoned in such a way or has characteristics that the underwriter wont approve the loan, the solution is to find a lender who will.  Chances are someone will want your interest! If there is something that needs to be fixed on the property holding up the loan approval, then get it fixed!  Be assertive and think outside the box. Offer to pay for all or part of the repair.  Ask the Realtors involved to chip in too.  Do whatever it takes if you want the house.

Scenario 3 – The appraisal didn’t come in high enough for the loan. Strategy: look at the appraisal.  Do the comparables make sense? Are they within the past 6 months and within 1 mile of the subject property?  If not, ask the listing agent to send comps that would help the appraisal. If everything looks alright, but you know the property is worth more, you can order a second appraisal.  You will have to pay $350-$450 again, so be sure it is worth it.

The bottom line is never give up.  If you can afford it, then make it happen. Ask questions.  Ask Realtors. Ask Lenders. Someone will have an idea to make it happen.