Lenders can deny a mortgage application based on specific criteria that assess the applicant's ability to repay the loan. One key reason for denial is insufficient creditworthiness, which encompasses various factors, including credit scores, debt-to-income ratios, and overall financial health. Additionally, lenders require income verification to ensure that the borrower has the financial means to support mortgage payments.
The decision to deny a mortgage application is guided by industry standards and individual lender policies. Factors such as employment history, savings, and existing debts also play critical roles in evaluating a borrower’s financial stability. Thus, if a borrower fails to meet these criteria, it is within the lender's rights to deny the application in accordance with established guidelines, making this the correct reasoning for the lender's actions.