3 Types of Clients Most Lenders Turn Away
You’d think lenders would be thrilled to hand out money to anyone with a pulse and a dream. Spoiler: They’re not.
Behind all the "we're here to help you" slogans is a hard truth—lenders have a very specific idea of who they want to lend to. If you don't fit the mold, many of them will happily (and quietly) move you to the “No Thanks” pile.
Here are three types of clients most lenders turn away—and what you can do about it.
1. Self-Employed Borrowers With "Creative" Income
Running your own business? Awesome. Want a mortgage? Prepare for a parade of paperwork.
Traditional lenders like nice, clean W-2s and predictable pay stubs. If your income is all over the place, or if your tax returns show "creative accounting" (read: heavy deductions), you might get turned down—even if you make good money.
Workaround: Look for lenders who offer bank statement loans, P&L loans, or DSCR loans if you’re buying investment property. There are ways to show you’re financially solid without fitting into the "standard employee" box.
2. Borrowers With "Bruised" Credit
Missed a few payments? Filed for bankruptcy five years ago? You're not alone—but many big lenders will politely ghost you if your credit score doesn't meet their squeaky-clean standards.
Workaround: There are plenty of lenders (hello, me) who understand that life happens. FHA loans, VA loans, and certain portfolio lenders can work with lower scores or recent credit events. You’ll need to show you’re back on solid ground—but one mistake doesn’t have to define you.
3. First-Time Buyers With "Limited" Down Payments
You’d think first-time buyers would be a lender’s dream: eager, hopeful, mildly terrified. But if you’re coming in with less than 20% down, some lenders see you as “high risk” and either tack on painful extra fees—or just pass entirely.
Workaround: There are excellent low-down-payment options (FHA, HomeReady, VA, USDA) designed specifically for buyers who don’t have a mountain of cash lying around. The key is finding a lender who actually wants to help first-time buyers.
Final Thought
Just because one lender says no doesn’t mean you’re unqualified. It usually just means you’re not cookie-cutter—and that’s okay.
Need a lender who works with real people (not just "ideal" borrowers)? Let’s talk. I’ve got options that actually fit you.
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If you’re serious about homeownership and want to avoid the common pitfalls, I’ve got something for you. Download "The Ultimate Homebuyer’s Guide"—a free resource packed with insights, checklists, and mortgage strategies to help you move forward with confidence.
Still have questions? Reach out—I’d love to help you navigate your mortgage options the right way.