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Javier and Julianne want to buy a $200,000 house. They have $40,000 for a down payment and need a $160,000 loan. They try to get pre-approved for a loan of that size but are denied. What is the most likely reason that the loan was not approved?

AThe down payment is far below the minimum needed

B.They have too much debt or a bad credit rating

C.The bank believes that down payment is too large for a house in that price range

D.The bank cannot pre-approve a loan until the house passes a home inspection

Verified Answer :

MattsWack13
BThey have too much debt or a bad credit rating

Answer:

B.They have too much debt or a bad credit rating

Step-by-step explanation:

The most possible reason for this denial can be : B.They have too much debt or a bad credit rating,

Their down payment amount is good , it is 20% of the total price of the house and it is considered appropriate by the banks.

So, the only option left is option B.

A bank denies loan if a person already has few loans running, or if he has a bad credit history.

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