According to the latest data from the Federal Reserve, approximately 25 percent of all mortgage applicants are rejected from the process. The statistic is a result of mortgage lenders struggling to minimize their risk after being burned by the high foreclosure rates affecting the nation. As a result, lenders have tightened up their standards for issuing home loans and thousands of consumers have gotten the cold shoulder.

The reasons for the rejection are varied and include factors such as an insufficient down payment , bad credit histories and the general inability for individuals to qualify for credit. Despite the disheartening news, prospective home buyers can take the time to learn from the opportunity and work towards passing the application process with flying colors in order to pursue their vision of the American Dream of home ownership.

Patience is a Virtue

Despite the general news that the here and now marks the best buyer's market ever, the climate will exist for some time. Word on the street is that the housing market recovery will take years and a consumer can use that time to take the steps to clean up the glitches that caused their mortgage application to be rejected in the first place.

After a rejection has been issued, mortgage seekers should feel free to contact the lender and find out the specific reasons for the brush-off. Based on that specific feedback consumers should implement strategies to:

• Improve their credit score (currently a credit score of 730 is the magic number for getting approval backed by the best home loan interest rates).
• Reduce debt, as the credit to debt ratio (available credit versus the amount being used) is a major credit score determination factor.
• Save more cash as banks favor consumers that have more liquid assets as well large down payments.

Readjust Your Expectations

The home buying process should begin with a consumer crunching the numbers on a mortgage calculator to determine how much house they can qualify for. Whether that step was skipped from the get go or a miscalculation occurred, a lenders rejection should be taken as a sign to get back to the drawing board as perhaps a home buyer was thankfully prevented from biting off more than they could chew.

Consumers who are still interested in buying a home now and have no desire to ride out the storm should double check their potential home mortgage limits and implement a different strategy to purchasing the roof overhead. Individuals rejected for jumbo loans should start looking at homes that can be backed by traditional 30-year fixed rate mortgages; opt to look for a more conservative condo instead of a single family detached or select a smaller home with less bedrooms or bathrooms than originally planned. All these decisions will still allow buyers to build equity and establish a stronger foothold for their next home buying transaction.

Shop Around

Rejection is a bit like a numbers game; while completing a number of mortgage applications can increase the odds of rejection it will also up the chances of receiving approval. If lender A has unceremoniously rejected a mortgage application, there are still dozens of lenders that may be willing to help you out.

When expanding a mortgage search, borrowers need to make sure they do not wear their heart on their sleeve and show any signs of weakness. A potential borrower does not need to let a lender know about their previous rejection and if they do, they may be charged higher fees for the process.

Whenever possible, conducting a mortgage rate search under the guise of complete anonymity is advised, as that will automatically level the playing field. Mortgage Marvel, the industry's premiere mortgage rate origination tool can make that type of search a breeze. Mortgage seekers can conduct a mortgage rate search simply by entering their zip code, as no additional information is required.

In turn, Mortgage Marvel will quickly deliver a list of all local homeloan opportunities from a variety of lenders. With that list in hand, consumers can opt to complete an online application form and will receive word about their loan status within 20 minutes. If a lender rejects a loan application, a consumer can opt to start the process with another provider.