I’m Damian Youell an experience mortgage broker with over a decade of experience. I’m dedicated to helping clients by offering an efficient and friendly service.
Over the years we have streamlined our systems and procedures and adapted processes to enable us to make the whole process very straight forward and easy for our clients.
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You’ve had a mortgage application declined. What’s next?
There are several reasons why an applicant might be declined after submitting a mortgage application but it doesn’t mean you are totally out of hope and unable to be accepted but don’t rush out to reapply again until you have understood the reasons why you were declined and made improvements or perhaps you need find a lender that is more suitable for you as lenders criteria’s and requirements can vary lender to lender.
If you have been rejected by one lender, there are numerous lenders with different requirements of an applicant, on and off the high street and specialist lenders which you may not have access to, so seeking professional advice from a mortgage advisor can help direct you to lenders and deals suitable for your own personal circumstances.
Why has my mortgage been declined?
There are different stages at which someone could be rejected for a mortgage and knowing which stage you were rejected at could help you understand exactly why your mortgage application was declined and if you are able to, make changes to improve for your next application.
Lender’s decisions are based on how risky they believe an applicant or a property is to issue a mortgage loan to. In some instances you may be able to appeal the lenders decision but it will depend on an individual application and every application is different.
Providing incorrect or conflicting information can also lead to a mortgage application being declined so it is important to check your application carefully for any discrepancies before submitting it to the lender.
Common reasons for a mortgage declined
• Credit score – every lender will request for a copy of your credit history and having a bad credit score may be an indication to them of an unreliable borrower. Having too many credit applications in a short space of time can leave a footprint on your credit report and have an adverse effect on your credit score.
• Income – lenders will assess your income against your outgoings to work out if you are able to afford the monthly mortgage repayments. If you are on a zero-hour contract or self-employed and you don’t have a track record, then a lender may think your job isn’t stable enough.
• Debt – if you have outstanding debts a lender may be wary that adding a mortgage loan will be unmanageable.
• Electoral roll – lenders use this to confirm you are living at the address you have provided so not being registered could have an impact on your mortgage application.
Stages at which a mortgage application can be declined
• Before a mortgage application – you may have already approached a high street or broker who has told you that you won’t qualify for a mortgage loan.
• After agreement in principle – this is not a guarantee that your application will be accepted but it can help you gauge from the lender how much you can borrow. Lenders will make an initial decision based on the information you have provided.
• Declined by underwriter – before a lender can approve a mortgage loan, the application will need to be sent to an underwriting team to fully check the application and assess whether you are a risk worth them taking on.
• Following a valuation – lenders may decline an application due to issues they have with the property itself.
• After exchange of contracts – although rare it can happen.
Hearing that your mortgage application has been declined can be upsetting and frustrating. Don’t give up yet. The main thing is to understand why you were rejected and address the issue by making changes, if possible, which can improve your application. It could be a simple fix. It is important to avoid rushing to apply again without assessing your original mortgage application first and improving your next application. A mortgage broker can help you assess the reasons why you were refused and assist you with improving your chances of being accepted on your next application.