It can be frustrating and disheartening to have your mortgage declined. You are probably feeling a sense of panic and worry, but Think Plutus will be quick to tell you that there’s no reason to be discouraged. We deal with a high volume of enquiries regarding declined mortgages and we know how to help. Read on to learn more about what you can do if you’ve had a mortgage declined, or contact us to speak to an adviser.
HELP! My mortgage application was declined
Mortgage rejections happen, but being declined once doesn’t mean you have no chance of being accepted elsewhere. The experts at Think Plutus have helped many clients secure the mortgage they need even if their own bank or another mortgage broker has previously declined their application.
The most common reasons for a mortgage application to be declined
- Poor credit score
- Adverse credit issues
- Low income
- Affordability (meaning the loan amount you applied for was too high)
- Insufficient evidence of income (particularly if you’re recently self-employed)
- Discrepancies with the underwriter
- The property is not up to the lender’s requirements
- Not registered to vote
- Not matching the lender’s profile, some lenders prefer to lending to a specific demographic
Mortgages can be declined for a wide range of reasons. Think Plutus are specialist mortgage brokers with a wealth of experience in securing mortgages with more challenging circumstances – we relish a more complicated case. This is what makes us the experts, and where some brokers and high street banks may quickly turn you down, our advisers will gladly work with you to get the best deal and interest rate (unless there truly is no hope at all).
Your location is not an issue for Think Plutus – you can begin the process online. It’s a great way to access our service from a distance and it can be a great time-saver for people with a hectic lifestyle. Everything will be done online and over the phone, so you won’t be required to make time for meeting in person.
Even if there is no hope of a mortgage for you right now, we can tell you what you need to do and when to try applying again. If your circumstances genuinely rule you out of applying for mortgage right now, we won’t waste your time by submitting an application anyway. Instead, we will give you a strategy to improve your circumstances so that you can improve your chances of approval later on. Get in touch today for expert advice from trustworthy specialists.
Why was my mortgage application declined?
One important step is to understand why your mortgage application was rejected – essentially, at what stage did it get declined? This will give your adviser an idea as to where it went wrong and why. Knowing this will enable us to get your mortgage back on the right track. For example, you may have been declined at the very first stage of getting an agreement in principle, or the rejection could have come at the stage of the lender assessing the property itself.
Here are the stages at which a mortgage can be rejected:
- Mortgage application didn’t proceed (you were told upfront that you wouldn’t qualify)
- Decision in principle not approved
- Declined after a decision in principle is approved
- The underwriter declined the application
- The property was deemed unsuitable after the mortgage survey
- The mortgage was declined at the last stage of the purchase
Regardless of the specific reasons for the rejection, ultimately it comes down to the lender being unsatisfied with your application. All lenders differ in the way they assess a mortgage application. This means that even if one lender has rejected you, there may still be another that will approve. Once a Think Plutus adviser has gathered all the information they need about you, they will be able to zero in on the right lenders to approach. They will also know which ones should be avoided altogether.
I didn’t even submit an application – I was just told I wouldn’t be approved
With high street lenders, it is not uncommon to simply be told that you have no chance of being approved. It’s also surprisingly common for high street brokers to process an application even when they know it will not be approved. Borrowers with unique circumstances, like being self-employed with little account history or having issues with your credit history, are more likely to be declined by high-street lenders.
If a lender has told you that you will be declined, we invite you to make an enquiry with Think Plutus. One of our specialists will examine your circumstances and give you an honest appraisal of what’s possible and what isn’t. For cases where a mortgage is off the table, there may be alternative finance options to help you buy a property. We can also give you some guidance on how to prepare yourself before approaching any kind of mortgage lender.
They say that knowledge is power, and in the mortgage market, this is particularly important. It is knowledge that separates an expert mortgage adviser from an average broker. Simply put, if there’s a mortgage lender out there that’s a good fit for your circumstances, we will find them. We’ll also identify the best deal that you will fit the criteria for.
What should I do if the decision in principle was declined?
If you were unable to secure an agreement in principle, you need to take stock of the reasons. Every lender carries out their own unique assessment, usually based on a points system. If you were declined at the agreement in principle stage, chances are you didn’t score enough points on their assessment.
When assessing an applicant at the agreement in principle stage, the following is considered:
- Your credit score
- Adverse credit
- Deposit amount
- Loan to value (LTV)
- Electoral roll registration (address history)
- Source of deposit (savings/gift)
- Your income (affordability)
There are some other variables that may come into the equation when assessing whether an agreement in principle is approved. If your application didn’t make it past these initial checks, you shouldn’t give up. Take your case to a specialist adviser and we’ll look at the lender you approached to try and establish what went wrong. This way, we can work out how to ensure it doesn’t happen again.
Think Plutus has access to a number of specialist lenders who are more flexible in their approach. Specialist lenders are more likely to avoid an automated points system or credit scoring and are more likely to assess cases on their own merit to judge whether an agreement in principle can be issued.
Mortgage agreement in principle then declined
It can be very frustrating to get an mortgage agreement in principle, only to be declined soon after. The most common reason for this is that the information you provide to the lender doesn’t match the initial assessment. There can be many reasons for this, such as discrepancies in the information or submitting an application with an unsuitable lender. If, for example, the lender examines your credit report and spots some issues that were not disclosed, this is likely to lead to rejection.
Lenders usually have a zero-tolerance policy when it comes to non-disclosure, so they may simply pull the plug. It may not even have been deliberate on your part. There are brokers out there who will apply to a lender that isn’t a good fit and simply hope for a good outcome. This is unprofessional and something you will never experience when dealing with Think Plutus. Our advisers will always gather a full profile of your circumstances before approaching any lenders, so they will only ever link you with suitable lenders for your situation.
If you’ve recently started a new job, or you’ve used a payday loan, you may also find lenders withdraw after the agreement in principle. Whatever the reasons behind the rejection, the fact is that some lenders are a better fit than others. If you have adverse credit history issues, full disclosure is always the best policy. It’s a good idea to obtain a copy of your credit reports online to get the head up on what credit reference issues lenders will discover.
A trustworthy mortgage broker will ask you all the right questions and always keep you informed of what you can do. Some specialist lenders will consider applications even where there are bad credit issues like high credit card debt, IVAs, CCJs, late payments, a debt management plan and bankruptcy. Once you tell us about your credit history and issues, we can get to work on assessing where you stand and which lenders will be most suitable from a pool of 100+ lenders with 10,000+ mortgage loan products.
Mortgage application declined by underwriter
It can come as quite a shock when your application is declined at the underwriting stage. A specialist adviser can often rescue an application at this point because it will have passed the initial stage and you will have an agreement in principle. The underwriter has spotted something that they aren’t satisfied with, so it may be a simple matter of having a conversation with the underwriter about the issue they have identified. Think Plutus can do this on your behalf.
What problems might an underwriter spot?
The common reasons underwriters decline a mortgage application include:
- Unsatisfactory proof of income, or income too low
- Undisclosed issues with credit
- Incorrect/conflicting documents supplied
- Mortgage not viable
- Discrepancies on the application form
- Applicant deemed to be high risk
All lenders vary in their methods of assessing a mortgage, and the same is true of the way underwriters assess cases. Underwriters must adhere to strict guidelines in their work. In many cases, underwriters will encounter something in your application that they feel uncertain about, or which doesn’t quite make sense. If there’s no-one for them to talk to about the issue, they will be forced to reject the application. If, however, there is a broker for them to speak to, it can make all the difference in getting approved at this stage.
Consider the following example:
A borrower is applying for a mortgage and comfortably meets the affordability via their income. The underwriter sees that there is a CCJ from 3 years ago and the lender you have applied to doesn’t accept people with a CCJ, even though the borrower meets the affordability requirements. The underwriter will simply decline the application because the lender’s specific requirements have not been met.
The above example illustrates why it is so important to approach the right lender. If an application is declined by an underwriter for this type of reason, it can be very difficult to get them to change their mind. With Think Plutus, your application will always be presented in an optimal way to the most suitable lender. If concerns are raised by the underwriter, we can provide the information to resolve the problem and prevent the application being declined. You can contact Think Plutus anytime and speak to one of our advisers.
Mortgage declined after the property survey
As part of due process, lenders will always carry out a mortgage survey of the property you are trying to buy. This is necessary to ensure the property they are lending on is suitable for a mortgage. No lender wants to lend on a property that is uninhabitable.
If the property doesn’t meet their criteria, a lender may decline your application. Perhaps the build material is unsuitable, or maybe they fell the property needs a lot of work before it can be lived in. If the property’s condition or construction type is cause for the lender to decline your application, you may find alternative lenders who will have a different opinion.
In some cases, the mortgage survey will result in the surveyor valuing the property lower than the price asked. If you have agreed a purchase price of £100,000, but the surveyor concludes that it is only worth £90,000, you will have to find that extra £10,000 (in addition to the deposit). It is extremely rare for a mortgage surveyor to increase their valuation and this can have a big impact on the mortgage amount your lender will offer.
Declined at the last stage of the purchase
It’s rare to have a mortgage declined at the final stage, but it does happen. Something may have been flagged at the last minute, causing the lender to pull out of the arrangement. There are many red flags that can arise throughout the process, and they can occur at any time.
If you’ve had a lender retract their offer at the last minute, contact Think Plutus as soon as you can. Our experts can investigate the case yo establish what went wrong and the reasons behind it. We can then find you an alternative lender who would be willing to lend on your specific criteria.
My mortgage was refused due to credit issues
It is important to disclose any adverse credit issues when submitting your mortgage application. The more open you are about your credit issues, the more your adviser can help. This is because they can find you lender that will be most likely to consider your application even with the credit issues.
Think Plutus are experts in mortgages with bad credit, and can help borrowers who have:
There are specialist lenders who offer mortgage products for borrowers with adverse credit. Even mainstream lenders may approve your application if it is presented in an optimal way. It all depends on when your credit issues occurred – the more time that has passed since, the better. Every case is unique, and you can consult Think Plutus to improve your chances of getting approved.
Mortgage declined due to affordability/income
As with everything else, lenders assess personal income in different ways. Whilst one lender will take an average spread across varied amounts of income, another will only look at your latest income figures. Another lender may only be willing to accept contractual employment for income, whilst some will be a better fit for self-employed people.
If you get the largest portion of your salary from overtime and/or bonuses, it is best to approach a lender whose assessments will take additional income into account, rather than just your stated salary.
Affordability is no different from other aspects of a mortgage assessment in that different lenders assess affordability differently. A more risk-averse lender may be willing to offer a higher loan amount, while some lenders will only offer a fraction of what you need by looking at the same numbers. On average, lenders will offer up to 4x your annual income, but the offer from some lenders will only amount to 3x, while others will offer 5x or even 6x in some cases.
Expect lenders to have a look at your bank statement and outgoings as well when assessing your affordability. And, as explained above, some lenders will not consider certain income figures you provide, while others will, and they will not always be upfront about this.
If you don’t have prior knowledge of the criteria of the lenders out there, trying to find the ideal lender is like taking a shot in the dark. Experienced mortgage advisers deal with every lender regularly and have a strong understanding of their criteria. Knowing the best place to direct your mortgage application should come easily to an expert, experienced mortgage broker.
Self-employed and struggling to get a mortgage
It can be difficult to get a mortgage when you’re self-employed. The old self-cert mortgages no longer exist and many mainstream lenders have reservations when it comes to considering self-employed borrowers. Nevertheless, there are many lenders who will consider an application from a self-employed borrower, especially when there are accounts and a verifiable trading history that spans 3+ years.
If you’ve recently made the switch to being self-employed or your business structure has changed, it will be more challenging. Some specialist lenders will accommodate self-employed borrowers with circumstances including:
- Being recently self-employed
- Accounts showing recent losses
- Recent changes in business structure
- Declining profits
- Lending based on retained profits and dividends for limited companies
- Adverse credit
What to do after your mortgage application has been refused
If you’re still uncertain of how to proceed, Think Plutus is just a phone call or online enquiry away. You will speak to one of our experts who will be able to establish exactly why your mortgage application was declined. Even if you’re uncertain of the reasons, our specialists have the knowledge to spot gaps in your application in order to give you strategies to solve the issues and maybe even overturn a refused mortgage. If your mortgage application was declined and you need help, Think Plutus.