When trying to buy that dream home the mortgage application process itself can be stressful and even downright upsetting if the answer is ‘no’. What can be even more frustrating is when there is no obvious explanation as to why.

Here are a few of the primary reasons most mortgage applications are refused;

1: You have an unappealing credit history. Have you previously accrued CCJs (County Court Judgements) for unpaid debts or regularly been in arrears on utility bills, etc? This will show on your ‘credit history’. You can check your own credit history with companies such as Experian.

2: You are considered to have too much debt already. A mortgage lender will consider whether you already have too much debt. This is important because they need to be confident that you are able to make the payments and can afford to do so.

3: You haven’t got a large enough deposit. The need for a deposit has been stressed since the 2008 Credit Crisis. Most lenders now require a deposit, usually 10% of the purchase price. However, there is a little flexibility here and there are also government schemes such as Help to Buy, aimed at helping people buy a home.

4: You have applied for lots of mortgages or loans! This is a mistake. Applying for many different loans, credit cards and overdrafts in the six months before you make an application for a loan will result in your ‘credit file’ being marked with lots of credit checks. This is not great for your credit score.

5: You have recently moved jobs, moved home or taken a pay cut. This will reduce your credit score and perhaps your ability to repay monthly payments. Lenders also like stability, so moving job and home regularly does not help your application, especially in the 6 - 12 months before your application.

6: You spend too much! As part of your application your lifestyle will be judged. If you are spending too much and blowing it all every weekend the lender will frown on this. They like their customers to be frugal and sensible.

7: You don’t borrow enough! Yes, that’s right. You can be too frugal. After all, if you have no history of credit, you have no credit history! It might seem silly but there is a perverse logic there.

8: You are too Old! Ouch, that stings, but if you are over 50 the chances you will be offered a mortgage of more than 15 years reduce considerably. After all, most lenders will have concerns about how you will keep repaying the debt after you retire. And there is always the risk of poor health too.

9: The property isn’t worth what it needs to be worth. Well at least this isn’t you, but it’s still frustrating if a mortgage valuation fails to meet the required figure. The good news is that you might be able to use the valuation to beat down the price. After all, the next buyer to come along will probably need a mortgage too.

10: The property is the wrong type. Again, frustrating, but some lenders will not lend on older property, multi-storey property, leasehold property - even thatched roofed properties! You need to know who best to go to and which lender will best meet your specific needs.

Contact Mortgage Required to speak to one of our experienced advisors who can help you throughout the application process.

Download our Free First Time Buyers Guide

Recent posts

The average seller’s asking price dropped by 0.4% in July, a bigger drop than we have typically seen. 

We explore the differences between Millennials and Gen Z and what both generations ideally want from a new home.

Should you overpay your mortgage? If you can put extra cash away you need to seriously consider whether you should pay more off on your mortgage or put it into a savings account.

Buying a property, especially in the current climate, is a big decision for first time buyers. We have listed a few tips that can help you buy your first propertyy

Does the time of year make a difference in house purchases? The answer is, yes and no.

The popularity of buying a house can vary depending on various factors such as regional trends, how the economy looks, and of course personal circumstances. 

If you are looking at putting your house on the market, you may want to consider giving your garden some TLC. Small changes can make your outside space a lot more attractive to potential buyers resulting in a faster sale.

Getting on the property ladder is a big milestone in life, and is not something to take lightly. There are several things to take into consideration such as saving up for a deposit, finding your dream home, and finding the best mortgage product to suit you. Here we look at UK first time buyer statistics.

If you are struggling to get over the hurdle of saving enough deposit due to being in a rental property, but wish to purchase your own home, you may be able to with a 100% mortgage. You will need to meet certain requirements and be financially stable.