You are here: Home - Mortgages - First Time Buyer - News -

Mortgage rejection: how to stop it happening again

Written by: Steve Seal
If you’ve ever been denied a mortgage, your confidence may have been knocked. But here’s what you can do to prevent it happening again.

Whether you’re a first-time buyer, second-stepper or someone who’s looking to downsize, getting the right mortgage is crucial.

But for those with a not-so-perfect credit score, this may be tricky, particularly for applicants who, as a result of their adverse credit rating, have been denied high-street lending.

When this happens, over half of consumers say they are too uncomfortable to apply for a mortgage again, according to Bluestone Mortgages’ recent Specialist Lending Tracker.

It also revealed two in 10 consumers who had been denied lending in the past believed they had no alternative options which would allow them to secure a mortgage.

However, being rejected from one lender doesn’t mean an automatic decline from all. So, what steps can you take to boost your chances of securing a mortgage in the future?

Review your financial situation

A good place to start is to find out why you have been refused a mortgage. Was it that credit card you couldn’t pay off, or missed repayments on a loan?

The lending criteria in place at high street banks typically don’t cater for customers who haven’t got a solid history of borrowing and repaying loans under their belts.

Anything but a near ‘perfect’ credit score can be rejected – especially for those headline rates. Taking steps to ensure you’re paying off any existing debt, for example, or setting up direct debits to regularly pay your monthly bills will reduce your reliance on credit and prove to lenders you are capable of managing your finances effectively.

Seek guidance from an adviser

An alternative route is to seek professional financial advice. Where you may feel left in the dark by high-street lenders, advisers can give insight as to why your last mortgage application was denied and guide you to the best option for your specific needs.

Brokers will be able to evaluate your individual circumstances and determine a viable and sensible lending solution which takes into account your financial situation.

Brokers also often have access to specialist products which are not available elsewhere – offering solutions which may be a better fit for your circumstances than those on the high-street.

Look beyond the high street

High street banks aren’t the only way to secure a mortgage. There is a wealth of alternative options for borrowers whose scenario might be classed as ‘complex’. Those who are self-employed, had a credit blip or have complex income streams or an unusual property should not discount their chances of achieving a mortgage.

Specialist lenders are experienced and keen to lend to those who may not fit the tick-box mentality of the high street banks and building societies.

Employing a more flexible approach to their lending criteria, specialist lenders don’t use automated mortgage application systems. Rather they manually underwrite each application to cater for the individual’s personal and financial situation.

Even if you have been rejected for high street lending, there is a very good chance a specialist lender can give you the solution you need.

Just because you may have a history of bad credit, it does not mean you can’t secure a mortgage.

Steve Seal is managing director at Bluestone Mortgages

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week