What to Do if Your UK Mortgage Application is Turned Down

If you’re a UK homebuyer, you may have experienced the frustration of having your mortgage application turned down. In recent months, many homebuyers have found it increasingly difficult to secure a mortgage, due to a variety of factors such as stricter lending criteria and economic uncertainty caused by the pandemic. In this article, we’ll take a closer look at why mortgage applications are being turned down and what you can do if you’ve been affected.

Stricter Lending Criteria

One of the main reasons why mortgage applications are being turned down is due to stricter lending criteria. Following the financial crisis of 2008, banks and building societies have been under pressure to tighten their lending criteria to reduce the risk of defaults. This has made it more difficult for some borrowers to qualify for a mortgage, particularly those with a lower credit score or irregular income. Additionally, lenders are now required to carry out more thorough affordability checks to ensure that borrowers can afford the repayments on their mortgages.

Economic Uncertainty

The economic uncertainty caused by the pandemic has also had an impact on the mortgage market. Lenders are more cautious about lending money in uncertain times, and this has resulted in some borrowers having their mortgage applications turned down. Additionally, the pandemic has caused many people to lose their jobs or have their income reduced, making it more difficult for them to qualify for a mortgage. This has particularly affected self-employed people, whose income may have been disrupted by the pandemic.

What to Do if Your Mortgage Application Has Been Turned Down

If your mortgage application has been turned down, don’t panic. There are several things you can do to increase your chances of being approved in the future. Firstly, check your credit score to see if there are any issues that need to be addressed. You can obtain a free credit report from credit reference agencies such as Experian, Equifax, and TransUnion. If your credit score is low, take steps to improve it by paying off any outstanding debts and ensuring that you make all your payments on time.

You should also speak to a mortgage broker or financial advisor. They can give you advice on what you can do to improve your chances of being approved, such as saving up for a larger deposit or improving your income. A broker can also help you to find lenders who are more likely to approve your application based on your circumstances.

Another option is to consider a guarantor mortgage. This is where a family member or friend agrees to act as a guarantor for your mortgage, meaning that they will be responsible for making the repayments if you are unable to. This can increase your chances of being approved, as it provides the lender with added security.

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