Mortgage declined or turned down?

A mortgage application might be declined for several reasons, often related to the borrower's financial situation, creditworthiness, or the property itself. Here are some common reasons:

1. Poor Credit History – You may be suffering from a low credit score, which might be as a result of regularly changing your address or not being on the electoral register. It might be because you have had missed or late payments on a loan or credit commitment. It could also be because you have adverse credit registered, for instance a default or CCJ. Your credit score will also be affected  if you have high levels of debt or are up to your limits on your credit cards. A low credit score can be viewed by lenders as a sign that it is a higher risk.

2. Insufficient Income - Each lender will have some sort of affordability calculator to work out what they deem is affordable. There are numerous different calculators and some lenders will be happy to lend more than others.  If you are self employed you may be treated by lenders in very different ways. Some lenders might want two years track record, others only one and then the income they use will also differ. Finally, the type of income you receive may not be acceptable to one lender, but acceptable to another.

3. Unstable Employment - Frequent job changes or gaps in employment may make lenders wary. Also those that are working on a contract basis will be adversely affected if the wrong lender is approached.

4. Inadequate Deposit - Some types of application might need a larger deposit than others and this is the same between lenders. For example, there are 100% mortgages available with some lenders but others will require varying amounts of deposit.

5. Property Issues - There are many construction types throughout the country; standard construction, ie. brick with a tile roof is acceptable to all lenders. But if a property isn’t standard, then some lenders may view them as unacceptable. On the other hand, others might be more than happy with them. There will also be situations where a surveyor has visited the property and they do not feel it is worth what is being paid for it.
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6. Missing Documentation - Missing paperwork, or errors or inconsistencies in documents can also lead to a mortgage being rejected. It is important to disclose full details to a lender and failing to do so can result in an application being declined.

7. Age or Loan Term - Different lenders are prepared to consider mortgages that run to different ages.

8. Non Resident or Visa Status - If you are not a permanent resident then many lenders will not consider granting a mortgage. Others are happy to consider with varying lengths of time in the country, or time remaining on visa.
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