Millions rejected for a mortgage – 6 ways to make sure the lender says "yes"

Millions of Britons have been rejected for mortgages in the past – but still gone on to find a way to buy a home.

New research from Which? Mortgage Advisers shows overall one mortgage holder in six has been rejected in the past – and it’s far worse among younger homeowners.

In fact, younger people are almost three times as likely to have been told "no" when applying for a home loan than average – with 41% of 18 to 24-year-old homeowners having experienced a mortgage rejection.

And while Which? only looked into people who successfully overcame rejection – that didn’t mean it was without a price.

The cost of mortgage rejection

One of the biggest problems with being rejected by one lender, is it can make it harder to get a loan from another.

Which? found that most of those rejected for a mortgage took more than three months to be accepted for another mortgage.

As well as frustrating, a delay this long could put property purchases at risk of falling through.

“While a mortgage rejection isn’t the end of the road when buying a home, it can clearly have a detrimental impact on the rest of your home-buying experience," said David Blake, principal mortgage adviser at Which? Mortgage Advisers.

Making sure they say "yes"

The good news is that moving from a "no" to a "yes" is largely a matter of organisation. And that can be fixed.

“Ensure you have all the documents and relevant information you need before submitting your mortgage application and don’t over-stretch your finances by applying for a loan that you won’t be able to afford,” Blak said.

Here are Which? Mortgage Advisers top tips for getting accepted when applying for a mortgage:

  • Mortgage applications can be rejected for a whole host of reasons, including poor credit score, property valuation and not being able to provide suitable documents.
  • Consider applying for a mortgage agreement ‘in principle’ when you’re at the house-hunting stage. This confirms that a lender is theoretically willing to lend you a certain amount, so it will give you an accurate idea of your budget and also prove to sellers and estate agents that you’re a serious buyer.
  • Find out exactly what information the lender requires when applying for a mortgage.
  • Don’t apply for a mortgage that you can’t afford. Generally speaking, if you have a good credit history you’ll be able to borrow four to five times your annual salary.
  • An independent mortgage adviser should be able to advise you on which lender you’d have the best chance of being approved for a loan with.
  • The lender offering the cheapest rates won’t always be right for you. A broker should be able to advise on the best lender and deal for your personal situation.

Read More

What you need to know about mortgages

  • Best new mortgage deals
  • The Family Deposit Mortgage explained
  • How to find the best mortgage advice 
  • How to remortgage

Source: Read Full Article