Why Has My Mortgage Been Declined?
It is very common these days for people with a perfectly good credit
history to be refused a mortgage. This is due in part to some lenders
over tightening lending criteria. You are unlikely to find this out
until you have applied and been refused a mortgage. If you get refused
then your credit rating can
be affected and could make it harder to
secure a mortgage with another lender.
HSBC is appears to be one of the worst offenders, we're hearing reports
that 81% of mortgage applicants to HSBC are being a turned away. RBS and
Abbey have also tightened their lending criteria to the extent that
applications that would have been perfectly good a year ago are now being
flatly refused without good reason.
Why is this? There is a limited supply of money available for mortgages
and some lenders are still very nervous about lending to anyone with the
slightest blemish on their credit file. To reduce risk lenders are being very choosey as to whom they
will lend to. They are cherry picking
those people with the greatest equity in their property -
typically, 40% or more. Frequently they require salaries much greater than
they would have accepted in 2008. Applicants with moderate credit facilities
are considered risky.
With falling house prices and unemployment posing a risk to affordability
it's understandable why some lenders are doing this but their over cautious
approach could make it harder for you to secure credit. Advice has never
been more important.
The good news is that not all lenders have taken this approach and you
should not be too despondent if you have been refused - provided your credit
history is good there will be a lender with good mortgage deals available to
Everyone's circumstances are different and need to be assessed
individually if a refusal is to be avoided. Contact us for an appraisal of
your "mortgageability" and avoid the risk of a stain on your credit file.