What happens if mortgage is declined

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If your mortgage application gets declined, there are a number of things you can do to improve your chances of getting approved next time. Check your credit file with the credit reference agencies Experian, Equifax and TransUnion to see what information they have about you.

You need to be on the electoral register at your current address so lenders can confirm who you are and where you live. Applying for lots of credit over a short period of time makes it look like you have money problems, so try to avoid taking out new credit deals at least a year before you want a mortgage. Many of them put the details from your application into a computer so you might have failed because of a mistake or error on your credit file. A lender is unlikely to give you a specific reason why you have failed with a credit application other than it relates to your credit file.

If this happens, then the lender should provide you with the details of the credit reference agency they used. You can ask for a smaller mortgage or see if you can get help from one of the government home buying schemes. Use our Mortgage Affordability Calculator to see what you can afford to borrow. Lenders have different underwriting criteria and they take a number of factors into account when assessing your mortgage application. It could be based on a combination of age, income, employment status, the loan to value, property location.

An independent mortgage adviser has experience of the market and is likely to have a better idea of the underwriting criteria and suitability of different lenders.

You can try saving up for a longer period of time so you have a larger deposit, or there are government schemes to help you if you only have a small deposit. You have to prove you have a steady income by showing tax statements and business accounts for at least the last two to three years.

You might also have to prove you have work lined up for the future — but the decision will vary from lender to lender. A professional mortgage broker or independent financial adviser who specialises in mortgages will be familiar with the mortgages on offer.

They will be aware of what different lenders are looking for before offering someone a mortgage, and will speak to the lender for you. MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices.

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Tool Money Navigator. Money Manager. Banking How to choose, use and manage bank accounts. Budgeting How to budget, find the best deals and switch to save money. In those cases, hope is not lost — there are other lenders out there, with different criteria. This is where a mortgage broker can save you a lot of time: using their knowledge of each lender to match you only with lenders who are most likely to approve you.

Sometimes, you might find that no lender will lend you money, for example if your credit rating is really low. Try speaking to an independent financial adviser about what you can do. It might be a good idea to get a broker involved: they can try and match you to the right lender. Or, they might decline your application entirely. Finally, you can still get rejected at this late stage if your financial situation changes, eg you lose your job, or take out a high-interest loan.

So try and keep your finances steady in the run-up to move-in day. This can happen with new build properties that are still being built. You can pre-empt this by asking your lender for an extension of your mortgage offer. If your offer has already expired, you can usually re-apply for the same mortgage if it exists. Alex decided to become a mortgage broker after he used one to buy his flat. Was he inspired by the amazing service?

The vast majority of the time, mortgage applications are rejected because the applicant approached the wrong lender or was given bad advice by the wrong broker. The market is vast and there are many mortgage providers out there with flexible lending criteria. Here are some of the most common reasons that mortgage applications are declined…. The good news is that we work with brokers who specialise in higher-income multiple mortgages , so you could potentially borrow more, as well as advisors who help people with non-standard income overcome mortgage rejection every day.

Read More. Some mortgage lenders decline customers with bad credit on the spot, while others will only consider approving them with caveats in place.

If you were declined because of an issue with your credit report, the brokers we work with could help you overcome this by finding a specialist bad credit mortgage lender for you. In the eyes of some mortgage lenders, being in your overdraft is a sign of financial mismanagement.

This can include both an arranged overdraft that your bank has agreed to or an unarranged overdraft where you have overspent on your account past a limit the bank has agreed to. This can include anything from playing the lottery to regularly gambling large amounts online. Underwriters can decline an application for reasons including bad credit and application discrepancies, but the right mortgage broker could help you overcome these issues. These are merely a handful of the issues the mortgage advisors we work with can help you bounce back from.

If your mortgage application has been rejected for any other reason , we can match you with an advisor who specialises in overcoming that specific problem. The above are merely a handful of the issues the mortgage advisors we work with can help you bounce back from. You can read about the general eligibility criteria for a mortgage in the UK in our complete guide to mortgage applications. This can be a setback to your homebuying ambitions, and in a worst-case scenario, the deal can collapse altogether, you might be left with marks on your credit report, and lose any non-refundable fees you paid upfront, depending on how far into the process you are.

A mortgage broker can boost your chances of a successful outcome the next time around. Most mortgage lenders will only pay attention to hard credit searches that appear on your credit reports in the last months, but how long you should wait to re-apply for a mortgage can vary dramatically depending on the reason you were rejected. For example, if you were rejected because you have severe bad credit, your choice of lenders is likely to increase over the coming months and years.

A mortgage broker can advise you on exactly how long you should wait based on your needs and circumstances. Yes, most mortgage lenders have an appeals process that you can speak to them about. This usually involves stating in writing why you think you have grounds to appeal, and it will be at the discretion of the lender whether they take a second look at your application. Other finance providers will be able to see any hard credit checks that were carried out when you applied for your mortgage, and they usually stay on file for two years.

This might cause them to question why other lenders are turning you down and therefore proceed with caution. They will want to make sure nothing has changed since you took out your original mortgage before they approve the agreement and if, for example, you have recent bad credit or had to take a pay cut at some point, you might no longer fit their eligibility criteria.

Not all lenders allow mortgage porting and some have a different eligibility criteria for it to others. It might even be possible to get approved for a new mortgage with similar rates and terms to your current one. Still not sure we can help? At Online Mortgage Advisor, we know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in previously declined applications, Give us more detail and we can get back to you with more guidance today.

If you have been declined a Mortgage after and Agreement in Principle, read our in-depth guide to find out what you need to do next. Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes.

The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision — to help as many customers as possible get the right advice, regardless of need or background.

Pete also writes for OMA of course! Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information.