What You Can Expect
Having your mortgage application turned down can feel like a major setback, especially if you already have your heart set on a particular property. It doesn’t mean that you need to give up, though! In fact, it can be a great chance to get some better advice about mortgages and find a lender who is the right fit for you. This is where a mortgage broker can help you.
Why Mortgage Applications Get Declined
Before we get into anything else, let’s take a look at why lenders usually decline applicants. They judge your application based on many factors, and the following can all have an impact:
- A poor credit history, such as missed payments, defaults, or CCJs.
- If your income is too low, a lender may fear that you cannot pay the loan back.
- Self-employed applicants or those with income that can vary can face even more scrutiny.
- A low deposit increases the lender’s risk.
- Applying to several lenders in quick succession can damage your credit score.
Going Back to the Drawing Board
A mortgage broker can help you take a step back and stop panicking for a moment, and then analyse your situation properly. They will look closely at the reasons for your application being declined and then offer tailored advice on how to move forward:
Looking at Your Credit
One of the most common reasons for rejection is a poor or lack of credit history. A broker can help you get a full credit report and identify any issues that need fixing. In many cases, simply giving it a few months to take some proactive steps can really improve your credit score and increase your chances of approval in the future.
How Much Can You Borrow?
Many people apply for more than they can realistically afford, especially if they use online calculators and fail to account for a lender’s specific criteria. A broker will paint a full picture of your affordability and ensure you only apply for mortgages you are truly eligible for. They’ll also advise on things like increasing your deposit or adjusting the property price range.
Finding the Right Lender for You
Not all lenders have the same criteria! Some specialise in supporting self-employed buyers or those with more relaxed income streams, and there are many that are willing to work with borrowers who have adverse credit. A mortgage broker knows which lenders are more likely to be flexible and understanding, and will target your application. This will save you time and protect your credit score.
Strengthening Your Application
One of a mortgage broker’s main goals is to show you as an ideal borrower in the eyes of a lender. How do they do this? They will focus on the following when putting together an application:
- Structuring your finances more clearly
- Recommending documentation to support your income
- Advising on joint applications if it improves affordability
- Suggesting a longer mortgage term to reduce monthly payments
They’ll also make sure your application is complete and backed up by all the required paperwork. This can make so much difference!
It’s Only a Bump in the Road!
Being turned down for a mortgage can be disheartening, but working with an experienced mortgage broker can help you to turn it all around. Why not get in touch with a great team today?