Which of the following is a valid reason for a lender to deny a mortgage application?

A valid reason for a lender to deny a mortgage application is insufficient income. Lenders evaluate a borrower's financial situation holistically, and income is a crucial factor in determining the applicant's ability to repay the loan. If an applicant’s income does not meet the minimum requirements established by the lender, it indicates a potential risk to the lender, as the borrower may struggle to make future mortgage payments. Sufficient income assures lenders that the borrower can handle monthly installments, along with other financial obligations.

In contrast, a high credit score typically reflects a borrower's strong financial habits and reliable repayment history, making them more appealing to lenders. A steady employment history suggests stability and predictability in income, which further boosts the chances of approval. Similarly, a low debt-to-income ratio signifies that a borrower is managing their debts well and has the capacity for additional borrowing, thus enhancing their profile as a suitable candidate for a mortgage.