Why has my mortgage application been declined?

Having a mortgage application declined can be very frustrating to say the least as it can slow down the process of buying your house. If this has happened to you, you’ll no doubt want to understand exactly why it’s been declined and find out what you can do to turn it around.

Mortgage declined on affordability


When you apply for your mortgage, your affordability is tested. This includes looking into any current debt you might have, such as car loans etc. If you have a large amount of debt, and aren’t showing signs of paying it off, the lender might be dubious about lending to you, as a mortgage will only add to your debt.

Credit score

Your credit score is taken into account as part of the affordability testing. Having a good credit score gives you the best chance of securing the best mortgage deal for the home you want. You can check your credit score by signing up to a free trial with Check My File. Your report will include outstanding loans, any missed or late payments as well as any other people that are financially linked to you. It is best to check your report contains no inaccurate information so that, if this is the case, you can get this put right before we apply for your mortgage.

Low income

Unfortunately, not earning enough money can be a valid reason for a mortgage to be declined. If your income isn’t likely to go up anytime soon, you might want to revisit the types of properties you’re looking at and lower your budget. Alternatively, you might also want to assess your finances and look at your incomings against your outgoings to see where you could make cut backs. If you’re buying a house on your own, there are things you can do to improve your application when applying for a mortgage on your own.

Not registered to vote

It sounds so simple but actually registering at your address to vote can have an impact on your mortgage application. Registering to vote confirms who you are and where your current address is which the lender always likes to see.

Mortgage declined after agreement in principle

Just like it’s says on the tin, this is only an agreement in ‘principle’. This document confirms that, based on the information you’ve disclosed, the lender would give you a mortgage for a certain amount of money, if you were to apply for one. However, this can change and the lender can refuse your application after the mortgage underwriter has ran an in-depth search on you, despite having previously given you a mortgage in principle. This might be the case if you’ve recently missed or made a late payment, or you’ve shown to be irresponsible with your finances. You can always ask the lender why your mortgage application has been declined so you have a clear idea of what you can do to help.

What should I do after my mortgage has been declined?

To give yourself the best chance of getting mortgage approved next time, you need to first understand why you’ve been declined and then try and address these issues. For instance, you might need to pay your bills on time, cut your cloth accordingly to show that your money can stretch further, pay any outstanding debts off etc.

How much money do I need to have to get a mortgage?

This can depend on a range of different things, such as the region you want to buy in and what sort of property you want to buy. If you’re buying your first house, this isn’t often your dream home that you’ll stay in forever, so think about what is affordable for you at the moment. You can use our borrowing amount calculator to help work out how might be able to borrow.

Is it possible to get a mortgage with bad credit?

Lender’s have to be careful who they lend money to, so if you have a bad credit score, you’ll flag up as more of a risk to lend money to. This isn’t to say that you can’t still get a mortgage, you may just have to consider alternative options of how to get a mortgage with a low credit score.

To speak to our mortgage advisers about the application process, please feel free to get in touch with us today.