Mortgage Declined in the UK: Your Comprehensive Guide to What’s Next

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 to find a lender that is more suitable for you as lenders’ criteria and requirements can vary from lender to lender.

If one lender has rejected you, there are numerous lenders with different requirements of an applicant, on and off the high street and specialist lenders to which you may not have access, so seeking professional advice from a mortgage advisor can help direct you to lenders and deals suitable for your own personal circumstances.

Post Topics

Why has my mortgage been declined?

Common reasons for a mortgage declined.

Stages at which a mortgage application can be declined

How to prevent a mortgage application decline?

Next steps

FAQs

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 lender’s 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 contractsThe point at which the buyer and seller exchange signed cont... – although rare it can happen.

How to prevent a mortgage application decline?

Fortunately, there are steps you can take to help prevent your mortgage application from being declined. By preparing in advance and taking the right steps to improve your credit score, you can increase your chances of having your application approved. Here are some ways to help ensure that your mortgage application is successful:

• Check Your Credit Report – Checking your credit report before applying for a mortgage is essential. This will give you an understanding of how lenders view you and if there are any discrepancies that need to be addressed.
• Manage Your Finances – Make sure all your bills are paid on time and that you always stay within your overdraft limit. Good financial discipline helps improve your credit score and makes you appear more attractive to lenders.
• Avoid Applying For Too Many Credit Products – Applying for too many credit cards or loans in a short time can negatively affect your credit score.
• Monitor Your Spending – Make sure you’re not spending more than you earn. Having too much debt can be off-putting to lenders and will reduce the amount they are willing to lend you.
• Seek Professional Advice – If you are unsure of how to improve your credit score or what you can do to ensure your application is successful, speak to a mortgage adviser who can help guide you through the process.

Next steps

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.

FAQs

What is a Declined Mortgage?

A declined mortgage is a refusal by a mortgage lender to grant a formal mortgage agreement due to various factors, which can include a poor credit history, insufficient proof of steady income, or failing the lender’s affordability criteria.

How Common is Mortgage Decline in the UK?

It’s not uncommon for mortgage applicants, including first-time buyers, to face mortgage rejection. The mortgage application process can be complex, and common reasons for decline often relate to a borrower’s financial stability and credit history.

What Factors Can Lead to a Mortgage Being Declined?

Factors such as a poor credit rating, not being registered on the electoral roll, a recent credit application, or discrepancies with credit reference agencies can all contribute to a mortgage decline. Lenders perform an in-depth check into your financial history and current financial responsibility.

Can a Mortgage Offer Be Declined After an Agreement in Principle?

Yes, even after an agreement in principle, which is an initial indication of mortgage affordability, a mortgage provider may still decline the application during the formal mortgage application process due to various reasons, including the findings from a detailed credit checkA check of a borrower's credit history, which is used by mor....

What Should You Do If Your Mortgage Application is Declined?

Seek expert advice from an experienced mortgage broker or a financial advisor. They can help you understand the mortgage lending criteria that led to your mortgage application rejection and can offer a range of mortgage calculators to assess your affordability.

How Can You Improve Your Chances of Mortgage Approval After a Decline?

To improve your mortgage chances, consider consulting with a specialist mortgage broker to find the right mortgage deal for you. A larger deposit, a consistent income, and a clean credit history can significantly enhance your mortgage approval odds.

Is It Possible to Appeal a Mortgage Decline Decision?

While challenging, it is possible to appeal a mortgage rejection. This will involve presenting new information that demonstrates your financial stability, such as a steady income or advice from a professional mortgage broker, which could alter the mortgage lender’s initial decision.