28 Jun 2022
What To Do If Your Mortgage Application is Rejected
Has your mortgage application been rejected, leaving you confused about what to do next? Don’t panic, just because one application has been rejected doesn’t mean the dream of owning your own house is over.
The first step to take is to find out why you were rejected, which could be for many reasons, to avoid making the same mistakes in your next application.
This blog will look into the potential reasons why you may have been rejected to help you understand the mortgage process even further, improving your chances for next time.
At Mortgages Online, we are experts in finding the right mortgage for you. Our team of online mortgage advisors can help find the right lender suited to your financial circumstances so that you’re much less likely to get rejected. If you require help with your application, don’t hesitate to get in touch today.
Common Reasons Why Applications Are Rejected
There can be many reasons why your application has been rejected. The most common usually include:
Poor Credit History
If you have been rejected for having a poor credit history, but you’re unsure why, you can check your report with companies like Experian or Equifax to see the information they have. If you find information that is incorrect, make sure to get this fixed as soon as possible.
A poor credit history will give lenders the impression that you aren’t financially stable. Read more on how to improve your credit score.
Too Many Applications
Applying for loans will be recorded on your credit history, and when a lender searches for your credit report they will be able to see your history in full.
So if you’ve been applying for lots of credit, a lender may see this as a warning sign. We suggest avoiding applying for credit loans a year before applying for a mortgage. This way, you can prove you are reliable and financially stable.
You’re in Debt
When applying for a mortgage, your lender will want proof that you’re responsible and reliable with money. Being in debt makes it tougher for lenders to accept your application and could be a factor in being rejected initially.
It’s important to focus on paying off your debt before signing up for a mortgage. However, if this isn’t possible you should get in touch with a specialist mortgage broker who can help find a lender willing to accept your application.
Read on: Everything You Need To Know About Adverse Credit.
Your salary plays a large part in securing a mortgage. If you don’t earn enough, you might find it hard to get one. However, no matter your salary, you should speak to a mortgage broker who can provide advice and explain which government schemes you could be eligible for.
Get in touch with Mortgages Online for expert advice and guidance about your salary and your chances of getting a mortgage.
Not Enough Deposit
A majority of mortgages will require a 10% deposit. For example, if you are buying a house for £300,000 you will likely need to save £30,000. The more you have for a deposit, the more likely you are to get accepted as lenders will see you as financially secure.
There are exceptions, however, such as if you are a first-time buyer – you may be eligible for a 5% deposit. Schemes like these have been set up to help more people get on the property ladder, so feel free to get in touch for more information.
You’re Newly Self-Employed
Those who are self-employed usually need to provide at least one year’s worth of accounts when signing up for a mortgage. This is because lenders will want to see evidence of a continuous income. However, if you haven’t been self-employed for this long, it can be tricky to find a lender willing to accept your application.
But don’t worry, there are specialist mortgage advisors who have lenders on their books willing to accept newly self-employed, so get in touch if you require help finding one or you would like any further advice on self-employed mortgages.
Been Rejected? Don’t Get Tempted to Apply Straight Away
Every application you make can show up on your credit profile, so you want to avoid applying to lots of different lenders, especially after a rejection. Lenders might see this and wonder why you have been rejected by others.
Instead, speak with your mortgage broker. They will be able to look into why you were rejected, so you know what to avoid for next time. Ask them their opinion on how to improve your chances next time, and how long you should wait until applying again.
Get in Touch with a Specialist Mortgage Advisor
When you’re ready to try again, get in touch with a specialist mortgage advisor beforehand. They will be able to provide advice on the market, understanding what’s on offer and whether your profile has the chance of getting rejected again.
They will also be able to speak to the lender on your behalf before you put your application in to get a better understanding of what the lender is looking for. This will help with your chances of getting accepted.
If you require specialist advice or help with securing your next mortgage, don’t hesitate to get in touch with the team at Mortgages Online. Give us a call on 03300 58 60 58 or email at email@example.com.