Under what condition can a lender refuse a loan application even if the applicant’s income appears sufficient?

A lender can refuse a loan application even if the applicant’s income appears sufficient when the applicant's main source of income is commission on sales. This is because commission-based income can be inconsistent and unpredictable, which makes it difficult for lenders to assess the borrower’s ability to reliably make mortgage payments over time. Lenders typically prefer more stable income sources, such as salaries or wages, that provide a predictable and steady cash flow. If the applicant primarily relies on commissions, lenders may consider this type of income too variable, regardless of how much the applicant may earn in a good month. This can raise concerns about the borrower's overall financial stability and their capacity to meet loan repayment obligations, leading to potential denial of the application.