What To Do When You Have Been Declined For A Mortgage

Get me a Mortgage

This is the first and most important area which is likely to show up factors that are stopping you from getting a mortgage.

It all starts with you getting your credit report - just apply online to Equifax, Experian, check my file or clearscore and you should get at least some version of it for free or cancel after the trial period. You'll get an overall score, which is a very broad and quick way for credit-giving firms to consider you as a risk, but the devil almost certainly will be in the detail.

Use this link to get a credit score if you need to check your report. https://www.checkmyfile.com/?ref=markjones9&cbap=1

Credit Score History

You might find this absurd, however if you haven't yet taken up any credit or very little of it, your credit score is likely to be low because there's little or nothing to rate you on. You can easily remedy this - see below. You should particularly check your report for any errors, such as old addresses which you're no longer attached to and old partners - either in love or life - that you've separated from. It is a sad fact that once you're tied to an address or a person, you're also connected with their credit history...

Get turned down for credit? 

Sadly once one lender turns you down for a credit application, it hurts your profile/score so you'll find it more difficult to get a 'yes' from someone else. In this situation always use a specialist mortgage broker like the mortgage advice centre uk.  

Big 'No-nos'

Unfortunately, 'sins' in credit terms are not all equal. Basically if you've been repossessed or made bankrupt, you won't be able to get credit until you are discharged. You will be able to get a mortgage with Defaults, CCJ, Missed loan payments, mortgage arrears and debt management plans.

Positive actions

Here are a few ideas:

• Take on at least one bill in your own name and make sure you make timely payments towards it
• Get a credit card - yes indeed - and either a) buy something small, ensuring you always make timely repayments or b) link it to a direct debit facility on your debit card such that at the same point each month, any outstanding balances on the credit card are paid off. People frequently come to grief through misuse of their credit cards, however you can equally well 'play the system' and watch your credit profile grow and grow.
• Get on the Electoral Register (just click on the link and off you go!) Being on the roll increases your overall legitimacy and traceability. 

Here, we're going to assume that you've managed to get Mortgage In Principle i.e. your lender has not only approved your basic application for a mortgage but has given you a statement saying that they're prepared to lend you up to a certain figure to buy a home, in principle, subject to the result of a valuation you have to pay for.The trouble is, that's not the end of the process either. Mortgage lending companies are often either less willing or completely unwilling to lend on certain types of property, whether because of their seller valuations, their construction materials, their defects or even their specific locations.

• Your lender undervalues your property: (click to find out more and what to do in this situation) - in essence you have a sudden shortfall between the mortgage the lender is prepared to lend you and what the seller's asking for the property. Something has to give or it's back to the drawing board.
• Your lender's valuation survey (NB not to be confused with your RICS survey - click to find out more and see below as well) uncovers a serious defect the property has. This might result in there being strict conditions being attached to your offer (such as you and/or the vendor committing to paying out money to repair a defect) or it might once again mean the end of the road for the property. This is one of the key reasons why we always recommend you booking your own RICS home buyers defect survey (click to book). The latter survey is purely for your benefit and is likely to uncover much more defects if there are any (the site visit is normally far longer) and your RICS surveyor is purely acting on your side and can help in any bargaining you have to do with the vendor.
• Certain lenders can be prejudiced against lending money to buy certain properties, particularly those of non-standard construction such as concrete built houses, steel frame houses and timber frame houses. They may require more in-depth surveys to be carried out or they may refuse point black to lend. (Click on any of the links in this section to find out more about these matters).
• The property defects we've touched upon can also be uncovered by your own RICS surveyor, necessitating further negotiations with your lender.
• Lenders can also refuse to lend because of some other unique aspect of your particular property. An example of a few of these might include:
• flats above or near workshops
• flats above or near restaurants/takeaways/pubs
• flats above or near sex shops, massage parlours or premises that stock explosive or toxic materials such as fireworks and dangerous chemicals
• flats in blocks of more than four storeys
• NB It's not that no lender will lend in these circumstances, it's just that your set-up fee and your repayment charges might be considerably more and you might find them harder to find as they're likely not to be found on the high street.
• How can you give yourself the best chance of getting a mortgage and successfully completing on your purchase or remortgage?

Booking a consultation with an independent mortgage broker can make the difference in all these scenarios. At worst, they can advise you about the steps you must take to make yourself a better mortgage prospect but at best, they can sift through tens of 1,000s of lenders and their products to find one that best suits your needs. You might be self-employed or a contractor or an overseas applicant for example; regardless, your mortgage broker can help and their independence means that they can choose products from the whole of the market: they're not tied down to selling any particular lender's products. Additionally, once you've submitted application forms, they can best advise on how you should put your best foot forward for success.

Your home may be repossessed if you do not keep up repayments on your mortgage.

 Speak to a Qualified Mortgage Adviser Today