Common Reasons Why Mortgage Applications Get Rejected 

The whole process of applying for a mortgage can be quite stressful and your hopes of getting on the property ladder or purchasing your next home can instantly be ruined by your mortgage application being rejected. The vast majority of people rely on a mortgage in order to purchase a property and whilst there is a range of mortgage products on the market, getting accepted by a lender might end up being more difficult than you anticipated. 

If you’re keen to make your first mortgage application but you’re concerned about getting rejected by mortgage lenders, we have listed some of the most common reasons why people are unable to get the mortgages they’ve applied for. Hopefully, this information can help you to ensure your application is accepted the first time round. 

Errors in the application 

One of the most common and often the most frustrating reasons why mortgage applications are rejected is because there is an error on the application form. It is important to ensure that you’re taking your time and checking that absolutely everything is correct whenever you apply for a mortgage. Even the smallest error, such as an incorrect spelling or house number, could result in your application being rejected and mortgage lenders are really particular when they’re considering your application to prevent any problems in the future. 

Low credit score 

All mortgage lenders use their own credit score to predict how risky you are to lend money to. If you have a really low credit score, this may result in them rejecting your application. Lenders have their own score level which they do not publish when it comes to your application, but it is beneficial to check your credit score before applying. This will provide you with the chance to improve your score  If you do have a low credit score, there are special lenders available to help with poor credit mortgages too. 

Asking to borrow too much 

Whenever you apply for a mortgage, in addition to looking at the Loan to Value ratio you require, you also need to find out how much you’re able to borrow from a mortgage lender. As a very rough guide, most leaders would provide you with a mortgage that is 4.5 times your salary, however, every lender is different and this is something you need to check. Mortgage lenders want to ensure that you’re able to make the repayments on your mortgage if the interest rate increases, so if you apply for a large sum of money but you have a low income, your mortgage is likely to get rejected. 

If you would like to find out how much money you could borrow from a mortgage lender, it is beneficial to speak to a mortgage advisor. They can give you a much better idea of how much you could borrow and, in turn, how much you’re able to spend on a property. 

Self-employed worker 

Unfortunately, when you’re self-employed or on a zero-hour contract, getting a mortgage can be more complicated. You will need to satisfy additional lender checks when making an application.

For example, self-employed applicants will need to provide tax documents and some lenders might want to see twelve months' proof of income. Some mortgage lenders are more likely to accept your application than others when you’re self-employed too, so do some research or speak to a mortgage advisor to ensure you’re making an application to the right lender for your individual needs. 

Applying to the wrong lender 

Simply put, not all mortgage lenders accept the same applications and depending on their lending criteria, your application might get rejected by one lender but accepted by another. If you don’t know much about the mortgage market, you might be unsure which mortgage lender you should apply to and this can result in you wasting a lot of time applying for unsuitable lenders. To prevent multiple applications from being rejected, which can reduce your credit score and make it even harder to get a mortgage, it is useful to get some tailored advice before you make your first application. 

Looking for a mortgage advisor in Bracknell?

If you’ve had a mortgage application rejected and you would like to get some professional advice before you make another application, don’t hesitate to contact us at Mortgage Required. Our specialist team of mortgage advisors near Bracknell can provide you with the sound guidance you’re looking for and we have experience advising on all aspects of the mortgage market. As whole of market advisors, we will do all we can to help you find the perfect mortgage products for you at this moment in time. 

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

There will be no fee for Mortgage Advice. There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, but we estimate it to be £399.

Mortgage Required Ltd, Finance House, 5 Bath Road, Maidenhead, SL6 4AQ is authorised and regulated by the Financial Conduct Authority reference 573718 at www.fca.org.uk.

The Financial Ombudsman Service is an agency for arbitrating on unresolved complaints between regulated firms and their clients. More detail can be found on their website: www.financial-ombudsman.org.uk