The two most common are insufficient credit and a high debt-to-income ratio. As far as bank statements are concerned, an underwriter might deny a loan if the sources of funds can't be verified or aren't “acceptable.” This could leave the borrower with too little verifiable cash to qualify.

Do underwriters deny loans often?

You may be wondering how often an underwriter denies a loan. According to mortgage data firm HSH.com, about 8% of mortgage applications are denied, though denial rates vary by location.

Why do loans get denied in underwriting?

Underwriters can deny your loan application for several reasons, from minor to major. ... Some of these problems that might arise and have your underwriting denied are insufficient cash reserves, a low credit score, or high debt ratios.