Declined Mortgage

Affordability checks and credit

Lenders will carry out an affordability check to ensure that you can afford the mortgage and the monthly repayments that you are applying for. This will incur a check into your credit history and your monthly outgoings. The lender may decline you if you cannot afford the repayments.

If you have:

• Poor credit history or no credit history 
• Debt
• Missed payments recently
• Have had inconsistent income
• Taken out payday loans
• You have had a default or County Court Judgement (CCJ) in the past six years
• Too many credit applications recently or in a short space of time.

If you have missed payments or have inconsistent income it suggests that you are a high-risk borrower. Taking out payday loans is detrimental to your credit score and should be avoided as much as possible.

A County Court Judgement (CCJ) is a court order which is issued against you if you fail to repay money that you owe. Paying off a CCJ within 30 days of it being issued could avoid it being added to your credit record. It is important to never ignore a CCJ.

Anything which raises a concern or suggests that you are a high-risk borrower will end up with your mortgage application potentially being declined, you can find specialist lenders out there who will accept applicants with bad or adverse credit but you may need help finding them.

It is so important to ensure your credit is in check before you apply for a mortgage and your information is correct. You should ensure that the address you are applying with is registered on the Electoral Roll so that it matches your application.

Self-Employed declined mortgage application

Being Self-Employed can come with its benefits and its risks and there is nothing worse than being told “no”. It could be due to a number of reasons to do with your credit history and nothing to do with your employment but there are a few reasons Self-Employed mortgage applications can be refused.

Whether you are a Contractor or just work through contracts you need to try and have a year’s worth of contracts (ideally as a minimum) with not many gaps between. You need to show that you have a reliable and steady income. Gaps that can be explained and are excusable such as illness or family reasons etc. are usually exceptional.

A common reason for being declined when you are Self-Employed is not having enough tax returns or proof you have paid your taxes. Maybe you haven’t been trading long enough to provide the lender with their required information.

Another common reason is not having enough proof of future income, you need to be able to show you can afford the mortgage you are applying for. You can get income projections from chartered accountants who will calculate your earnings and provide these alongside your mortgage application.

Other reasons you could have been declined

Small mistakes on your mortgage application have the potential to result in a rejection, lenders’ do not have the time to review applications for mistakes and rely on the information provided at face value. Lenders criteria will differ across the market and you need to check them as you need to fit them in order to borrow from them. You need to ensure you read through these and fit all of them.

Deposits are so important and if you do not provide a big enough amount then you will instantly be turned away. If you do so happen to have a low credit score or another reason why you could be rejected, then a big deposit will boost your chances of hearing “yes” from a lender.