Declined a Mortgage

Was Your Mortgage Application Declined?

Having a mortgage application declined can be a real blow. However, while you may be tempted to put in another application with another lender, it’s best to take a moment to think about why you may have been declined. We answer some of the most common questions we get about rejected mortgage applications. We’ve helped others get a mortgage in various circumstances, so we may be able to help you too.

What percentage of mortgage applications are declined?

It can depend on age. Research discovered that 41% of people aged 18-24 who now own a property had previously been rejected for a mortgage. In stark contrast, a mere 4% of those aged 60 or over said the same thing. The research did, however, only focus on those who now had mortgages. It is possible others may still be trying and failing to get approved.

What happens if a mortgage application gets rejected?

If the lender you applied through turns you down, ask them why they made that decision. This is important information that could help you when you make your next application, assuming you eventually do so.  Not all lenders will tell you why they declined you and may just suggest you check your credit file.

The most important thing you can do in this scenario is not to head off to another lender and immediately apply with them instead. They may accept you, but you won’t know for sure. And if they don’t, they may end up rejecting you for the same reason the first lender did. You would also end up with another search on your credit history, which could have an impact when you try another application. In short, this could mean you’re sabotaging your own efforts to get a mortgage.

If you’re wondering why you might get a rejection, keep reading. We’ll cover some of the most common reasons next.

Speak with one of our experts about Declined a Mortgage

Speak to our expert brokers on all types of mortgages, remortgages, even if you have bad credit. One of our expert brokers will be able to review your current situation and advise on the best way of moving forward with our knowledge and access to over 100 lenders. The initial advice is free, there is only a cost if you proceed with a mortgage.

Why would a mortgage application be declined?

There are various reasons why this might occur. However, some happen more often than others. For example, if a lender sees that you have a poor credit history, they could be wary of lending to you. You can ask for a copy of your credit report from all the agencies that hold it, including Equifax and Experian. Check it and look for any bad credit items, such as missed payments, defaults or CCJs (County Court Judgments), you can also look for any errors that may affect how a lender looks at you. You have the right to get them corrected.

You may also have a low credit score, could have been due to bad credit, but it can also be due to not having any or much credit in the past.  When you’ve not had any or much credit in the past, there is little to no evidence that you are going to be good at making monthly payments.  Therefore, the first company to lend to you is taking the bigger risk.

Here at Clever Mortgages, we can run a credit file on your behalf (with no impact to your file or score) and discuss the contents with you, this could give the immediate reason why you were declined and what the next course of action is.

There are two other common reasons that may show on your credit report too. The first is having too much debt in relation to your income. The second is applying for too many sources of credit. This doesn’t need to be repeated mortgage applications either; any request for credit, whether it is for a credit card, store card, or any other loan, will likely appear on your credit file.

Another common reason is that you’re not on the electoral roll for your existing address. Fortunately, this is quick to fix by visiting the official Electoral Commission website.

Some lenders may also think the numbers don’t add up. For example, your deposit could be too small in relation to the amount of mortgage they will offer you.  They may think you aren’t able to afford the mortgage… or your earnings may not reach their required level to be able to lend to you. You may not be able to afford the amount you think you can. You can use our mortgage calculator to get an idea of your borrowing potential.

In some cases, you may not be their ideal customer. Sometimes, a lender specialises in a certain section of the market, and if you don’t fit that mould, you won’t be accepted.

With many other reasons also possible – including recent self-employment, Debt Management Plans (DMP), Individual Voluntary Arrangement (IVA) , and even Bankruptcy.

How soon can you apply for a mortgage after being declined?

There is no limit on how long you should wait. However, that comes with a vital message. If you’ve been rejected, you should take a step back and review your application again with fresh eyes. Check your credit report as we highlighted above. Make sure you ask the lender why you were turned down (they may not tell you). It could be there is a reason you can do something about, such as an error on your credit file that looked bad when the lender spotted it, even though that info was incorrect.

As lending criteria and acceptance levels can vary from lender to lender, one decline doesn’t mean that the next lender will decline you.  However, its important you choose the right lender to approach next.  This is where we can help you and armed with your credit history, income and affordability we know the lenders are more likely to accept you.  These could be high street lenders or what are called ‘non-high street’ which are not always available directly to customers.  This is just due to the nature of their business and their desire to deal with mortgage advisers who will give the advice to a customer.

Joint mortgage declined? 

If you’ve applied in joint names and been declined, it could be that one or both of you have something on your credit file, as mentioned above or you’re not meeting the lenders criteria.

We can take a look at both your credit files, income and affordability, then look at which lenders might accept a joint application or discuss applying in a single name for the time being.

Take advantage of some help from the team at Clever Mortgages

If you’ve been turned down for a mortgage and you are unsure why, or simply need some expert advice to turn the odds in your favour, speak to the experienced mortgage advisers at Clever Mortgages today. With extensive knowledge of bad credit mortgages and specialist lending requirements, it could be just the input you need.

Speak with one of our experts about Declined a Mortgage

Speak to our expert brokers on all types of mortgages, remortgages, even if you have bad credit. One of our expert brokers will be able to review your current situation and advise on the best way of moving forward with our knowledge and access to over 100 lenders. The initial advice is free, there is only a cost if you proceed with a mortgage.