TOP 5 REASONS PEOPLE DON’T QUALIFY FOR A MORTGAGE

Getting declined by a bank doesn’t always mean you can’t get a mortgage.

It simply means you need a clearer plan — and often a better lending option.

Here are the most common reasons people get turned down 👇

1️⃣ Not enough down payment or equity

Lenders require proof of where your down payment comes from.

You can use your own savings or a gift from immediate family.

✔️ minimum 5% down for owner-occupied

✔️ 20% down for rental properties

✔️ 20% equity minimum for refinancing

Without the minimum funds in place, approval simply isn’t possible.

2️⃣ Insufficient income to qualify

Homes are expensive — and lenders use strict formulas to measure affordability.

If your income doesn’t support the payment, taxes, and debts, approval won’t happen.

✔️ adding a co-signer can help

✔️ rental income may be usable

✔️ alternative lenders allow more flexibility

Sometimes it’s not “no” — it’s just “not with that lender.”

3️⃣ Qualification rules and ratios

Lenders calculate two key ratios:

✔️ GDS — housing costs only

✔️ TDS — housing costs + all debts

If the numbers are too high, approval is blocked.

✔️ GDS limit around 39%

✔️ TDS limit around 44%

✔️ shorter amortizations tighten qualification

A small change in debt or payment structure can make a big difference.

4️⃣ Credit issues or late payments

Credit scores matter more than most people realize.

Late payments and collections can drop your score fast.

✔️ missed payments reported to bureaus

✔️ going over limits hurts scores

✔️ too many credit pulls lowers rating

Consumer proposals or bankruptcies have even bigger impacts.

5️⃣ Too much debt

High debt loads destroy mortgage approval ratios.

Car loans, credit cards, and lines of credit all count.

✔️ large car payments reduce borrowing power

✔️ maxed-out credit limits increase TDS

✔️ refinancing is limited to 80% loan-to-value

Sometimes debt consolidation is needed before mortgage approval is possible.

💬 Final Thought

A decline from the bank doesn’t mean you can’t buy a home — it just means you need the right strategy and lender.

If you want a clear plan to qualify, send The Frontline Mortgage Group your numbers and we’ll review them together. 💬