If you’ve been declined a mortgage it may seem like impossible. In reality, it isn’t the case at all. Just because one lender declines you, it doesn’t mean that they all will. Every lender has their own set of guidelines that they follow when considering your mortgage application. If you’ve been declined, you may feel as though you’ve been left in the dark. Not every lender is forthcoming on why you’ve been declined. As a result, we’ve put this article together to give you some clarity on what to do next.
- Find out why you’ve been declined.
Not every broker or lender will be clear on the reasons you’ve been declined. If you’ve not been informed on the reasons, then contact your broker or lender and ask them. Once you’re aware of why you’ve been declined, you can speak to a specialist who has experience with declined mortgage cases to get your mortgage back on the track.
If you’ve been declined, the chances are you were at high risk to begin with. This is nothing to be panicked about. Your advisor or lender should have informed of you this at the start based on the information you provided. Specialist mortgage brokers will often obtain all the necessary information and then only approach the most suitable lenders who are likely to approve.
The most common reasons for being declined are
– Bad credit
– Low or zero credit score
– Affordability (low income or high outgoings)
– Unsuitable property (needs heavy repair or unsuitable construction type)
– Applying with an unsuitable lender
Each reason will give you or your broker an indication of what to do next in order to gain mortgage approval.
- Speak to a specialist mortgage broker
There are many brokers out there but may lack the knowledge and expertise of knowing what to do when a mortgage has been declined. If you’re using a broker already and have been declined, then this shows that the broker didn’t clearly understand the lender’s criteria.
Specialists understand that each lender is different as is each applicant’s circumstances. Experienced brokers will only ever approach lenders that are suitable and highly likely to accept. Seasoned mortgage brokers should in theory know lender criteria like the back of their hands. Experienced brokers can also be more comfortable in staying focused when things aren’t going to plan. For instance, if any problems do arise, then brokers can speak to underwriters to establish any problems and iron them out.
It’s common for novice or inexperienced brokers to just apply and hope for the best. This can be detrimental to not only your time and money, but also your credit file. Many people have lost properties due to bad mortgage practice, so be sure that the advisors you use are credible and experienced in your field. For instance, if you have bad credit, use a bad credit mortgage specialist. If you’re self employed, use a broker who has expertise in self-employed mortgages.
- Don’t give up on a mortgage
Certainly don’t give up hope of buying a property and getting a mortgage. Contact a specialist mortgage broker and be upfront, open and honest with your circumstances and that you’ve been declined. If a mortgage isn’t yet possible, then a reputable advisor should state this. Furthermore, they’ll give you information and advice on what to do next before you apply for a mortgage. You can then keep in close contact with the advisor before progressing through to a formal mortgage application.
Please don’t keep applying to various different lenders and hoping for the best. This is because each time you apply and are declined, it will cause your credit score to decrease each time. It can also show up that you’ve applied for credit but have been declined.
This guest post was written by Expert Mortgage Advisor, who are experts in getting people mortgages with bad credit.