Which of the following is a common reason for loan denial in the mortgage application process?

Insufficient creditworthiness or credit history is a prevalent reason for loan denial in the mortgage application process because lenders heavily rely on a borrower’s credit profile to assess their ability to repay a loan. A strong credit score indicates that a borrower has a history of managing debt responsibly, which gives lenders confidence in the borrower's reliability. Conversely, if a borrower has a poor credit score, limited credit history, or any indications of financial mismanagement, lenders may deem them a higher risk, leading to a loan denial.

High income levels, ownership of multiple properties, and excess available assets are typically viewed positively by lenders and can actually enhance a borrower's loan application. These factors can assure lenders of financial stability and a greater capacity to manage loan repayments, making them less likely reasons for denial compared to creditworthiness issues.