Why Mortgage Applications Get Denied—and How to Stay on Track

Getting pre-approved for a mortgage is a huge first step—but it’s not a guarantee. Many buyers in 2025 are running into common roadblocks that can derail the homebuying process.

According to Tony Hamblin, a mortgage expert at tmanmortgages.com, "We’re seeing the same issues come up again and again. The good news is, if you know what to watch for, you can avoid them."

1. High Debt-to-Income Ratio (DTI)

This was the number one reason for mortgage denials last year. When your monthly debt payments are too high relative to your income, lenders start to worry.

"It’s easy to get stretched thin with today’s home prices," says Tony Hamblin. "Paying down credit cards or car loans before you apply can significantly improve your DTI and your approval odds."

2. Credit Score Issues

Even if you meet the minimum score, a weak credit profile can lead to higher rates or stricter loan terms. Late payments, high balances, or recent credit inquiries can all hurt your chances.

To stay mortgage-ready, keep your balances low, make every payment on time, and avoid opening new accounts while you’re in the process.

3. Insufficient Savings

Many buyers focus only on the down payment—but that’s just the beginning. You’ll also need funds for closing costs and reserves (extra savings after closing).

"Start building your savings as early as possible," recommends Tony Hamblin. "Even small, consistent deposits can add up fast."

4. Financial Changes Mid-Process

One of the most surprising deal-breakers is when buyers make big changes after pre-approval. Switching jobs, taking on a new car loan, or co-signing for someone else can all throw your mortgage off track.

"Pre-approval isn’t the finish line—it’s the starting line," warns Tony Hamblin on tmanmortgages.com. "Keep your finances steady until after closing to avoid last-minute surprises."

The Bottom Line

The mortgage process can be complex, but you don’t have to go it alone. Working with an experienced loan officer can help you anticipate these hurdles and move forward with confidence.

"Our job is to guide you through every step," says Tony Hamblin. "When buyers are informed and proactive, they’re far more likely to close successfully."

Sources: NAR.realtor, Bankrate.com, Experian.com, FreddieMac.com