Why Some Buyers Get Denied—Even After Pre-Approval

In 2025’s competitive housing market, getting pre-approved is an exciting step—but it’s not a guarantee. As Jorge Martinez of championmortgagelending.com explains, “Pre-approval gets you in the game, but the real challenge is keeping your mortgage on track through closing.”

Here are the four most common hurdles buyers are running into—and how to avoid them.

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

Too much debt compared to your income remains the #1 reason mortgage applications are denied. With rising home prices, many buyers are stretching themselves thin without realizing it.

Solution: “Start by paying down credit cards, car loans, or personal loans before applying,” Jorge advises. Lowering your DTI makes your application stronger and can improve your loan options.

2. Credit Score Challenges

Even if you meet the minimum credit score for your loan program, a weaker credit profile can still create issues—higher interest rates, tighter loan terms, or even a delayed approval.

To protect your credit:

• Keep balances low

• Avoid late payments

• Don’t open new credit lines while in the process

“Your credit doesn’t just get checked once,” Jorge explains. “Any changes mid-process can impact your approval.”

3. Not Enough Funds to Close

Many buyers focus solely on saving for the down payment—but that’s only part of the puzzle. You also need to budget for closing costs, which can range from 2–5% of the home price, plus cash reserves for emergencies.

Tip: Start saving early. “Even small, consistent deposits can add up quickly,” says Jorge. “It shows lenders you’re financially ready.”

4. Job or Financial Changes During the Process

This is one of the biggest surprises for buyers: changing jobs, taking on new debt, or even co-signing a loan while under contract can derail your mortgage—even if you're already pre-approved.

“If your financial situation changes, your loan has to be re-evaluated,” Jorge warns. That can lead to delays or denials right before closing.

Final Word: Pre-Approval Isn’t the Finish Line

The key takeaway? Pre-approval is just the beginning of the journey. “My role as your loan officer is to help you avoid these common pitfalls and keep your homebuying plan on track,” Jorge says on championmortgagelending.com.

With the right guidance and preparation, you can avoid surprises—and get to closing with confidence.

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