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Have You Been Declined for a Mortgage?

February 5, 2019

When your mortgage application is declined it can upset the apple cart and can cause confusion as to your next step.  Our Mortgage advisors will try to re-assure you that there may be other options or lenders as a lot of people do get declined and are successfully placed with other lenders.

We have put this information together to help you understand what goes on behind the scenes when your application is submitted;

These are some of the most common reasons for a Decline;

  • Your credit search has shown up something not acceptable
  • Your monthly income is too low
  • Your have applied for a loan higher than allowed on their guidelines
  • Your Self Employed income proof is not acceptable
  • The underwriter thinks there is a discrepancy with the information provided
  • The valuer has advised the lender that the property is not suitable for their lending guidelines
  • You have approached a lender for something they do not offer.

Of course there are lots of reasons why your application could be declined, which is why one of our advisors could help you place your mortgage when a high street bank may say no. We specialise in the more complex mortgage application.

We are able to help you where ever you live in the UK, as we are largely online and telephone based which will enable you to apply for your mortgage online without ever having to visit our offices.  If you have any questions we are also at the end of the phone and keen to help with any all difficult questions.

Sometimes it is not possible to help today but we can let you know what action you need to take and then arrange a time in the future to re-visit the application. In the unlikely event we are unable to help at all, we will let you know promptly and not waist any of your time.

We would always look positively at your plan and application and let you know what steps you need to take to get your plans back on track.

 

Why was my Mortgage application was rejected?

Your Mortgage application could have been declined by a lender at any stage from getting the initial decision to lend to the conveyance process at the end.

This is a list of different stages of the process that your application could be declined;

  1. Initial meeting with the lender or Mortgage broker
  2. The lenders AIP – (Agreement in principle or sometimes know as decision in principal)
  3. The lender declined once the application was submitted
  4. The Mortgage underwriter rejected the application
  5. The valuer advised the lender the property was not suitable security
  6. Application declined once all the checks had been completed due to additional information being submitted or discovered.

It is essential you let us know why your Mortgage was declined and at what stage it has halted. It will help us to understand what has happened and what actions need to be taken to get things going again.

Get in touch for friendly mortgage advice

Call us today on: 01202 232 160

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I did not think I could get a mortgage

Sometimes clients are approached by their local bank and asked if they are interested in a mortgage, they might spend the time to speak to the bank Mortgage Advisor and complete all the necessary forms and checks. Yet all too often to be told that your Mortgage application was declined due to one of the banks policies or our current circumstances. This is more often true for people who have a need for a mortgage detailed view of their circumstances due to being; self employed, a sole trader, or may have had issues or disputes on their credit record.

Please make a mortgage enquiry with Total Home loans as our staff our fully trained and will help you through the whole process taking the time to understand your personal circumstances or call us on 01202 232160.

 

What to do if your DIP / AIP (Decision in principal) was accept and then the application has been rejected

It is very frustrating when you have submitted you mortgage application and you are declined at the final hurdle. The most common reason is the application does not match the Agreement in principle information, the credit search has been assessed in more detail or the you have chosen the wrong lender for the finance.

It is essential you tell the lender your full circumstances as they may withdraw the offer if they discover something that you have not disclosed, even if you were not aware it had to be disclosed. Some Brokers may submit your application to a lender that does not match your requirements or the lenders, at Total Home Loans we will always look at your circumstances before approaching a Lender. Therefore we only apply to the most suitable lenders for your circumstances.

These are some of the most common Reasons for an application being declined:

  • Your Credit search showing up credit problems
  • Your proof of income not being acceptable, especially If self employed
  • Your income not being high enough for the loan requested

It is important that a mortgage broker asks you the right questions and considers your application carefully taking special consideration of any Debt management plans, CCJ’s , missed or late payments and any adverse credit history. Only then can the broker assess any adverse credit or other obstacles and start a dialogue with suitable lenders.

 

Mortgage Underwriter at the Lender declines your application

Once your broker has prepared your application and it has been submitted to the lender for approval with the Agreement in principle, there is still a chance it might get declined. The underwriter will assess the whole application and if they will decline the application if something does not quite make sense or it does not fit their criteria.

This is another key part of the process where Total Home loans can help. They can speak to the underwriter and explain your individual circumstances.

Some typical examples why an underwriter will decline an application;

  • Credit search showing up credit not disclosed
  • Your income not being high enough or acceptable as short term or temporary
  • The application form does not match up with the other documents provided
  • They are not happy with the property type or its construction
  • They are unable to give you a long enough mortgage term due to your age.

Lenders and banks all work in a slightly different way. However they all have to follow their lending guidelines and if they are unsure of something on your application they generally ask for a second opinion from a colleague or call the broker directly to discuss your application.  It is important that your broker is available to discuss the application to stop the mortgage being declined at this late stage. At Total Home Loans we consider this as a vital part of our service.

 

Property Survey stops the application

A Lender will instruct a property surveyor to visit the property and ensure that they are lending on suitable security for their criteria. They do not want to lend on a property or you to borrow the money on your dream house if it is not going to stand for the period of the loan.

The valuer will also add a value to the property which is very rarely higher than the purchase price but might be lower if they deem it to be too high. This could leave you a little short of funds or even room to re negotiate the purchase price – Your estate agent will generally help you in these situations and liaise with the vendor.

 

Mortgage declined due to poor or bad credit

If you have poor or adverse credit is essential you declare this to the mortgage broker or lender – The More information they are given at the beginning of the application about your bad credit the better informed they are to help.

At Total Home loans we are able to help clients, who have issues in the past or present including:

  • CCJs- County Court Judgements
  • Missed loan or mortgage payments
  • Previous repossession
  • Late mortgage or loan payments
  • Defaults

A high street lender may not accept an application with any adverse credit but a specialist lender may accept an application if it fits their criteria. It all depends on the level of adverse credit you have and the issues occurred. We will look at each case individually and will be happy to speak to assist you.

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Important Information

We do NOT charge any upfront cost. We may charge a typical fee of up to 2% of the amount of the loan for arranging a mortgage. E.g. A loan of £100,000 would be likely to incur a fee of up to £2000. Any fee we charge is ONLY payable upon successful completion of the mortgage. We will also be paid a commission by the lender.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.

Total Home Loans Limited is an appointed representative of Intrinsic Mortgage Planning Limited, which is authorised and regulated by the Financial Conduct Authority. Intrinsic Mortgage Planning Limited is entered on the FCA Register (http://www.fca.org.uk/register) under reference 476653

Registered Address: 55 Cobham Road, Ferndown Industrial Estate, Wimborne, BH21 7RB. Registered in England and wales, company registration number 6436412.

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