There are many different reasons as to why a mortgage application can be rejected.
- Credit history: Poor credit history is often one of the most common reasons as to why people are rejected. Your credit score takes into account any existing debts and this then gives lenders an idea as to whether or not you would be able to keep up with repayments.
- Affordability: Sometimes lenders may look at all the information on your application and simply decide you may not be able to afford the repayments. Mortgage brokers can usually go through any affordability checks prior to the application to ensure you are suitable for the lender.
- Self-employed:If you are self-employed this can often mean your job and income can both be insecure. However, this does not mean you will be rejected, but you may want to look at mortgage options suitable for those who are self-employed.
- Outstanding debt: You may find is more difficult to get a mortgage approved with outstanding debt. It is recommended you try and clear as much debt as you reasonably can before starting a mortgage application.
- Application Errors: It is important to make sure you do not miss out any key information on your application. Unfortunately, mistakes can happen which can ultimately mean your application could be rejected due to even the smallest error.
The first most important thing to do if your mortgage gets rejected is to find out why by speaking to your broker or the lender. If you think there may be any discrepancies on your credit file, you could try speaking to one of the credit reference agencies. It is advisable to take a break away from making application if you do get rejected and apply again when you think you’re ready.