You can get on the path of homeownership with the right advice. This article outlines what you should do next if your mortgage application is rejected.
Why might a mortgage application be rejected?
Lenders use different criteria and take into account many factors when evaluating mortgage application. There are many reasons why a mortgage application is declined.
- Mortgage rejections are often due to a poor credit history. To determine your repayment ability, lenders will assess your score. This score reflects your financial health.
- Registering your details on the electoral register is the best way to increase your chances of getting approved.
- A high level of debt: Lenders are more likely to reject mortgage applications if they see a large amount of outstanding debt. Reduce your debt before you apply for a mortgage.
- Multiple credit applications. Each credit application triggers an inquiry into your credit report and could affect your credit score. Lenders may be concerned if you make too many credit applications. For a Mortgage advisor Gloucester, visit https://www.geniusma.com
- Concerns about affordability: Your lender may doubt your ability to pay for mortgage payments, resulting in a rejection. Consider reevaluating your finances if you find yourself in this situation.
- Contract work or self-employment: Due to the perceived volatility of income, contract workers and self-employed individuals may have difficulties. There are specialised mortgage options for these borrower categories.
- Low deposit: If the deposit is too small, it may be rejected by lenders if they do not meet their criteria. In this case, saving for a bigger deposit or looking at alternative mortgage options may be beneficial.
- A mortgage application that is declined due to errors or omissions can be the result of a credit report error or a lack of information. Review your credit report regularly for errors and make sure all the relevant information is included in your mortgage application.
