What stops you getting a mortgage?
No one wants to go through the trouble of finding and applying for a mortgage, only to be declined. As well as being frustrating, it can also stop you from buying your chosen house. So, what stops you getting a mortgage? It's handy to know any potential issues so that you can do your due diligence before you apply.
Of course, there can be a number of reasons why a mortgage lender might decline someone, but in this post, we'll cover a few of the most common...
Poor credit history
When you apply for a mortgage, the company you apply to will do a credit search on you to check your credit history. This helps them to see how you've managed other credit accounts and whether you've had any problems with credit in the past, such as late payments, defaults or county court judgments.
A poor credit history makes you a greater risk to a lender and so they are more likely to decline your application - or offer you higher rates.
No previous credit
Just as a poor credit history can stop you getting a mortgage, so can no credit history at all. The purpose of a credit search is to check your previous credit behaviour so if you don't have any, this also creates a risk for lenders.
Too many credit applications
Each time you apply for credit and a credit search is completed, this leaves a footprint on your credit report. When you make a large number of applications in a short space of time, this can be an indication that you're struggling financially - or that you may already be over committed when it comes to borrowing money.
Not registered on the electoral roll
Verifying your identity is a key part of the process when you apply for a mortgage. When companies do a credit search on you, part of this search includes checking whether you're registered on the electoral roll at the current address you've provided in your application.
If you're not registered, then this can cause problems with your application - and even mean that you're declined a mortgage.
Errors on your credit report
It's a great idea to check your credit report before applying for a mortgage. This will help you to identify any issues up front - as well as to see if there are any mistakes. Even a simple typo can create problems in an application so it's better to be safe than sorry.
There are 3 main Credit Reference Agencies in the UK and we'd recommend checking your report for all of them.
Not using a mortgage broker
Don't let lack of support be what stops you getting a mortgage! When you book your free consultation with one of our friendly advisers at BB Mortgages, we'll chat to you about your specific circumstances so that we can find a mortgage that's best suited to you and your current situation.
Of course, we can't guarantee that your application will be accepted but we have the experience and industry contacts to ensure you have the best chance possible.
Book a FREE Consultation!
We'd love to help you buy your perfect home! To chat to one of our friendly advisers, book your free consultation today...