What To Do if Your Mortgage Gets Declined

The financial crisis saw the suitability critera for mortgage lending get much tighter for prospective applications, meaning much less people are likley to get their application approved first time. 

Although it can be difficult when your mortgage declines, there are steps to resolving the issue. First of all, you will need to find out why your application failed in the first place and if there is anything you can do to improve your application. 

Here is a list of some of the common reasons a mortgages get declined: 

Not on the electoral role 
Your lender uses the information captured on the electoral roll to validate your address. If you have applied for a mortgage without being on electoral roll your mortgage may decline. It is simple to register so don’t let that get in the way of your application. 
Poor credit history 

One of the biggest worries when it comes to mortgage applications is the elusive credit history score. Most people have no idea what it is or how it is determined. Basically, a credit history score is a record of all your previous debt and your experience paying it back. It is not a criticism of the amount you have borrowed previously, more an evaluation of how you handled the debt. Any late or missed payments will put lenders off giving you money and your mortgage application may decline. 

If you suspect or are aware that you have bad credit history then it is important that you outline this immediately to your mortgage advisor. They will be able to work out exactly how you incurred the debt and find out why the debt was not paid back or you missed payments. You may need to speak to a specialist depending on how bad your score is. 
Poor employment history 

If you have moved around a lot or gone periods without employment, it will put lenders off giving you a mortgage as it alludes to you having an unstable income and they may fear you will not be able to keep up with your monthly payments. Mortgages can also decline if you do not match the criteria set by your particular lender on the amount of time you have worked for your current employer, which is usually determined by the amount of probation time you have before being offered a permanent contract. If your mortgage has declined for this reason then look around for lenders who have more flexible criteria or speak to your employer for a letter to confirm your employment. 

High Rate Payday Loans

Payday loans are a black mark against your application as it makes it appear as though you cannot get through the month on your current income. Any late repayments will also make it difficult to get a mortgage. 

Too many financial commitments / debts

Car Finance, sofa loans, credit card debt, store cards etc. can all add up to a large amount. You may have been refused a mortgage because the amount you currently owe affects your affordability. Lenders will add up what you currently owe and work out how much you pay each month to pay off the debt. If these monthly payments are too much, you may decline a mortgage or your lender may ask you to consider paying off some debts before proceeding with the application. 
Some lenders will also take into account other large regular monthly outgoings such as nursery or school fees. If you pay these, you may need to look for a lender who does not count these payments as a debt. 

Aside from credit score, affordability, is one of the major reasons why people get their mortgage declined. Affordability takes into account your current income in addition to any current outgoings and the value of the home you want to buy to see if you can comfortably afford the monthly repayments. If for whatever reason the lender does not believe you can afford the home, you may need to look for a cheaper property or try another lender with more flexible affordability criteria. 


It can be difficult getting a mortgage if you are self-employed as you are rarely guaranteed a set monthly income. It is a huge risk for a lender to give you money without assurance that you can keep up with your monthly repayments. You may have to speak to a specialist mortgage broker if you are self-employed. 

Important note: 

Make sure you take the time to assess why your mortgage has declined before applying again – too many mortgage applications can also be detrimental to the success of an application. If you are worried about any aspects of your application then speak to your mortgage or financial advisor. They will work with you to find a lender to meet your requirements. 

Take a look at our Getting Mortgage Ready article to try rule out any issues which may be affecting your application. 

Publish date: 15/09/2017