Actions To Take If Your Mortgage Application Is Turned Down

May 16, 2023

If your mortgage application has been declined, it’s important to make sure that you understand the reasons why. You will naturally feel disappointed and may be concerned at what the future will bring. Here’s what you can do to get back on track and make sure that your next application is successful.

It’s important to remember that not all mortgage lenders use the same assessment criteria, and just because one company has declined your application, it doesn’t mean that the next one will. However, it is a good idea to seek advice from a professional mortgage broker before submitting another application.

This is because an experienced broker will know which lenders will be a good fit for your personal circumstances, and will be most likely to make you an offer. Multiple failed mortgage applications can impact negatively on your credit score, so preparation and research will put you in a better position.

Make sure you are registered to vote

A simple mistake that many people make is not registering to vote at their current address. This can be easily overlooked but put right with an online application that takes five minutes. This proves to lenders that your identity is genuine.

Check your credit history

A poor credit history is one of the most common reasons that a mortgage application is turned down. Any issues that you have had with your finances in the past six years will be recorded on your credit file, such as missed or late loan repayments, County Court judgements, and Individual Voluntary Arrangements (IVAs).

Sometimes factual errors such as a misspelt address can affect your credit score, so make sure that everything is correct and up to date. If your score is below average, you can start to improve the situation immediately by paying off outstanding debts and reining in your borrowing on credit cards.

Some lenders put more weight on credit scores than others. If you have any concerns about your creditworthiness, it may be beneficial to seek some advice about specialist lenders, who will consider the whole picture rather than just automatically reject your application outright.

Carry out your own affordability checks

One step all lenders will take is to look at your income and outgoings to check that you can afford the monthly mortgage repayments on the property. There are plenty of online calculators available so that you can get an idea of this yourself before you apply.

Be totally honest about your earnings and expenditures, as the lender will ask for evidence in the form of bank statements, wage slips, or tax returns. If you want to improve your prospects, see if there are any non-essential monthly expenses that you can cut back on, such as digital TV subscriptions.

It is also a good idea to avoid taking out other loans, such as car finance or an overseas holiday deal in the months leading up to your mortgage application.

If you are looking for IVA mortgage advisors, please get in touch with us today.

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