What is the outcome of a mortgage application if the borrower does not meet the criteria set by the lender?

When a borrower submits a mortgage application, it undergoes a thorough evaluation process by the lender, which involves assessing various factors such as credit history, income level, debt-to-income ratio, employment status, and overall risk profile. If the borrower does not meet the established criteria set forth by the lender, the logical outcome is that the application will be denied. This is a safeguard for lenders to minimize financial risk and only extend credit to those who demonstrate the ability and willingness to repay the loan.

Loan denial is a common result for applications that do not align with the lender's requirements. It serves as a protective measure that helps maintain the health of the lending institution while ensuring responsible lending practices. While options like loan modification and loan extension relate to adjustments made after a loan is already in place or in default, they do not apply to the initial application stage. Loan approval, on the other hand, is only granted when all criteria are satisfactorily met, which contrasts directly with the situation described in the question.