What do I do if I get turned down for a loan?
If you have been turned down for a loan, the best thing to do is to ask why. You may not have fit the guidelines with the lender that you were looking to use. Your lender should give you a statement of denial which should detail exactly why you were turned down.
If this is a purchase, with the denial letter, you should be able to get out of your contract and get your deposit money back.
Ask your lender what it would take for you to get a loan or what steps you can take. My advice would be to contact a lender/broker who has access to multiple banks. By running your scenario by them, they should be able to give you an answer as to whether or not the loan will work.
The main thing to remember is not to get discouraged. The next thing you want to do is get educated.
If you get turned down for a loan the main thing you want to know is why. The mortgage professional that turned you down should answer this question for you. There could be a lot of reasons why you were turned down- your credit score, amount of money you make vs. the amount of debt you have, the amount of money you have towards a down payment, reserves in the bank. By knowing the reason why you didn't qualify, you can then fix what's holding you back.
Once you determine why you got turned down, you can devise a plan that will help you get to the point where you can get approved for a loan. A really good mortgage professional will take the time to help you with a plan.
It might take 6 months or so, but if you stick to your plan it will happen, and the benefits of home ownership are extremely rewarding.