Whether it be moving, buying your first home or an investment property we all know that buying a property can be a stressful process. Perhaps you’ve had that offer accepted, started your legals and are looking forward to picking up those keys, however then you get an email that says your mortgage has been declined.
It’s situations such as this that can certainly then make you wonder what the right thing to do is! You may be wondering whether the sale will fall through and that day when you collect your keys would seem to have faded into the realms of impossibility.
Well, the first thing you will want to make sure you do is not panic. There are times when, for a variety of reasons, a mortgage application can get declined but it doesn’t have to mean the end of the road.
Generally, when you use a broker there will be a significant amount of due diligence carried out before a mortgage illustration or agreement in principle is provided. We do this in order to make sure we not only recommend the right product for you but the most suitable based on your circumstances. This is the key; based on your circumstances.
So, let’s take a look at the various things that could lead to your mortgage application failing. It’s important to highlight the word could as it may not always cause a bump in the road!
- You’re not on the electoral roll / registered to vote
Did you know that not being on the electoral roll could make it harder for you to get a mortgage? Yes, this is because not being will make it harder for lenders to confirm your identity including where you live. We always recommend that you are registered!
- You have a poor credit rating
Your credit rating is something that could impact the cost of your mortgage and whether lenders will be willing to provide you with finance. If you have a poor credit rating you may find it harder to get a mortgage for example.
There are lots of places such as Credit Karma, Equifax and Experian who will be able to tell you what your score is.
Something to be aware of is that having no credit rating can also be a problem, so it is wise to have some form of credit such as a credit card or even a mobile phone contract to help with your application.
- Income & Deposit
This is probably one of the more common reasons a mortgage application could get declined. Simply that your income is not high enough for the lender to provide the loan you need. In addition to this, if your deposit is too small then you may not be able to get the finance needed to plug the gap.
There are a number of specialist schemes (particularly for first-time buyers) that may be suitable in this situation and we would generally recommend these as part of our initial advice and consultation.
- You’ve lived in the UK for under three yearsIf you have lived in the UK for under three years you may find it harder to get a mortgage.We say harder as it’s not impossible, but it’s situations such as this where it would be advisable to speak to a broker (such as ourselves) who will be able to provide advice and guidance.
- There are errors on your application form
By errors, we mean not just typos and spelling mistakes but inconsistencies such as names, dates and other details that don’t match up.
There are also times when lenders can make mistakes, and this is another reason to use an experienced broker who can check thoroughly and correct if needed.
If you are looking to obtain a mortgage, we always recommend choosing an experienced and reliable broker who will be able to ensure you have the highest chance of success with your application.
Our team are here to answer any questions you may have and you are welcome to contact us online or by calling 01322 553282.