Has Your Mortgage Been Declined?

Credit Issues

Often, a poor credit score can cause problems for mortgage applicants. Check your credit file with all the credit reference agencies, as the information they hold might differ. If you spot any obvious issues like late payments or CCJs, this is likely to have prompted the rejection. Remember, if anything is wrong, you can take steps to correct your credit file, and get your application back on track. And, if the issues are valid, there are still plenty of specialist lenders who will consider you! It’s just about knowing where to look.

Find out how to get a mortgage with a poor credit history >

Not Registered to Vote

It might come as a surprise, but being registered to vote is actually crucial when applying for a mortgage. You need to be on the electoral roll with your address listed so lenders can confirm who you are and where you currently live. If you think this might be the problem, it’s an easy fix – simply register online or through your local council!

Too much Debt

Lenders want to know that you can handle your mortgage repayments. If you have a lot of debt already – particularly secured loans or payday loans – this might be the cause of your rejection. You also might get declined if you have a history of frequent credit applications, as this might indicate to the lender that you have difficulty managing your money month to month. Remember, any hard search of your credit score is recorded for future lenders to see – so apply cautiously!

Administrative Errors

Sometimes, simple human error can be at the heart of the issue. That’s why applying with the help of an expert is often the safest bet. It’s important to check your application carefully, as any mistakes and inconsistencies can put the lender on their guard for financial crime. And, if they suspect fraud or money laundering, they are unlikely to risk lending you a penny.

Affordability

Affordability is a common reason mortgages are declined. If your income is below the threshold the lender would consider affordable for your loan amount (worked out via income multiples), you’re probably going to receive an automatic rejection. The good news is, you can improve your affordability by saving up and increasing the size of your deposit. This will make the loan-to-value ratio smaller, and reduce the lender’s risk.

Being Self-Employed

Annoyingly, high street lenders can get a bit funny about applications from self-employed people. You’ll usually have to provide much more information as a self-employed applicant, and many people just don’t have this to hand. If you don’t have proof of two or three years of steady income, you’re likely to get rejected. Thankfully, there are lenders out there who specialise in providing finance to the self-employed.

Mortgage advice for the self-employed >

What to Do Next

By now, you’ll hopefully have a better idea of why your application was unsuccessful the first time around. Here are some steps you might want to consider moving forwards.

Consider Appealing the Decision

If you think your rejection was unwarranted and unfair, it is possible to appeal the decision. When doing so, expert advice can be invaluable, and offer a greater chance of success. At When the Bank Says No, we have years of experience liaising with lenders and appealing unfair judgements. Let’s get your application back on its feet.

Make Yourself More Attractive to Lenders

If a financial mishap or skeleton in your credit closet has reared its head and disrupted your plans, now is the time to try and improve the situation. There are a range of effective strategies you can use – from boosting your credit score to increasing your deposit to minimising debt and budgeting carefully.

Apply Again with Care

We know it won’t take long until you want to apply again – especially if you’ve been declined at a late stage and want to get a property purchase moving. Whatever has happened, it’s important not to panic, but fill out your application carefully, and take the time to investigate the whole market to find the most appropriate lender for your situation this time around.