Reasons Why Your Mortgage Application Might Be Declined

Credit Score Mortgage Advice in Doncaster

Failing a credit score for a mortgage

It is an easy task when it comes to a credit score for a mortgage. The only thing that can make it difficult is if you cannot meet the lender’s criteria. The common reason for this is that particular mortgage lenders have a strict set of requirements that need to be met by the applicant. If you have been unable to meet the credit score for the mortgage and the lender is not providing a reason why you have failed, we know it can be frustrating.

A Mortgage Broker in Doncaster can be really beneficial if you are wondering why your application for a mortgage may have been declined. They will have the extensive experience and knowledge you need for your questions to be answered. Here at Doncastermoneyman, we have a team who will take a thorough look at your file and will be able to recommend you the most suitable lender to go with.

A way to improve your credit score is by meeting certain requirements. For example, paying off a credit card balance in full can help with this. Being on the voters roll in your local area can also massively help with improving your credit score. As well as this, getting rid of any bank accounts, store cards and credit cards that you no longer use can be helpful. Overall, having a cleaner record can help.

If you are looking for more ways to improve your credit score, check out our article on ‘how to improve your credit score‘.

Don’t feel defeated if your application is rejected by one lender, there may be a possibility that you will be accepted by another lender. This does require you to have the least amount of credit footprints registered in your name. This should be as clean as possible in the systems and should not have any pending balance in order for the lender to trust you and your credit score easily.

Declined for a mortgage on affordability

Looking for Specialist Mortgage Advice in Doncaster will mean that you need to keep in mind that every mortgage lender has different ways they calculate the amount they can borrow. It is possible to have 10 different approaches from 10 different lenders for the same mortgage application.

If you are self-employed, you might find that one lender will be more lenient with your overtime and bonuses counting towards 100% of your income. On the flip side, you might find some lenders will not look at bonuses as income and some might accept tax credit, maintenance and even child benefit.

When it comes to looking for Specialist Mortgage Advice in Doncaster, there are plenty of benefits. With an expert mortgage broker by your side, you will be able to get the knowledge you need when approaching the lender as well as discussing the chances of your application getting through.

We do suggest that you get Specialist Mortgage Advice in Doncaster before filing an application. Getting the relevant mortgage experts will highly pay off as they will be able to guide you on the right path organise yourself and avoid being disappointed by approaching the wrong lender.

Do you find yourself outside of lending policy?

All lenders work around their rules and emphasise borrowers meeting their lending criteria. You might find that some of the requirements in the criteria are tougher to meet than the others and this is what causes many applications to be declined. Below are some of the reasons why an application may be turned down as it does not reside inside the lending policy.

• Loan amount not meeting the minimum or maximum limit
• Mortgage terms do not meet the minimum or maximum age limit
• Sole mortgage requested by a married applicant
• Property construction not meeting required standards
• Insufficient deposit
• Non-satisfactory credit history
• Insufficient period of employment or self-employment

A Specialist Mortgage Broker in Doncaster by your side can be best when it comes to selecting the best mortgage plan for you. If you feel you are in any of the situations that have been mentioned above, it’s good to get in touch with a dedicated mortgage advisor to receive help through the process.

How to Improve your Credit Score in Doncaster

If you are looking to boost your credit score, a specialist mortgage advice in Doncaster could be the option for you! An applicant who has a high credit score will have more of a chance of getting a mortgage acceptance compared to one with a much lower score. Contrary to this, it all depends on the lenders having their own internal scoring systems.

Every lender has built their own scoring system over the years. In the case where your application isn’t successful, it doesn’t mean it will apply to all lenders. If you do have a Mortgage Advisor in Doncaster by your side in the process, they will provide you with the support and information you need as well as try and match you to the right lender. The role of your advisor is to invest in you and has the same goal as you which is to find you the best deal.

In the UK, there are a variety of credit reference agencies such as Experian and Equifax. We do recommend checking as many of these agencies as possible in order to get a full picture of your credit score. As well as this, one of the agencies may have incorrect data. Here at Doncastermoneyman, we recommend Check My File to customers. This platform collates data from major agencies including the two mentioned above and provide a broader view of how your credit score is performing. When you sign up, you will have a 30 day free trial on the platform and then it will be a £14.99 a month, however, the account can be cancelled at the end of the trial.

Wondering what you can do to improve your credit score? Check out the best practices you can follow below.

To improve your credit rating:

Avoid Unnecessary Credit Searches:

One thing that can harm your score is carrying out multiple credit searches. We recommend that you are careful when using price comparison websites which have a reputation to credit search you. If you are wanting to apply for a mortgage in the near future, it is best that you stay away from other credit. Even though having some credit and paying it back helps your score, further down the line, lenders will not like to see you increasing your borrowings right before making a mortgage application.

Check You Are on the Voter’s Roll:

A great way to boost your credit score is to be on the electoral roll. It shows a lender your stability. Check that your name is spelt correctly and that it’s registered at your current address, not an old one. You can easily register online.

Don’t Run Close To Your Maximum Limit:

Maxing out your card every month can harm your score. If you do use a credit card, make sure you pay
off the balance in full each month. By doing this, you are showing that you are good at managing your money. The worst case scenario is exceeding an agreed card limit or overdraft. Lenders want to know that you take your finances seriously.

Check Your Address History Is Keyed Correctly:

There have been cases where credit reports highlight that the applicant is living in two places at once. The reason behind this is that the applicant may have forgotten to tell one of their credit providers that they have moved to a new house. Make sure all addresses are spelt correctly. You may find it difficult to do this if you live in a flat due to the flat/apartment number can be formatted in different ways.

Close Any Unused Credit Accounts:

If you have any store/credit cards you no longer use, you should contact the providers to get the account closed. Initially, this can harm your score briefly as the credit reference won’t be able to see if it’s you closing the account down or the provider. On the flip side, it’s one step back to take two forward. As well as this, it’s a good thing to do to reduce your chance of falling victim to fraud should you not be aware that you have lost a card that you don’t regularly use.

Remove Financial Links to others:

In the circumstance you are financially linked to a family member or ex-partner, this could impact your score. The account will remain in operation for a long the financial association is still active. In order to remove one of these links, you should get in touch with the credit reference agencies and make a request.

The common opinion amongst consumers is that it’s unfair how lenders assess applications, however, lenders feel differently about this. The way they operate is a cheaper option with computers providing more consistent outcomes.

A way to increase your chances of being accepted the first time is to send an up to date copy of your credit report to your Mortgage Advisor in Doncaster. Make sure you give enough information to your advisor for them to get the full picture of your finances. We do find that there is a small majority of lenders that do not assess credit scores. This is because they go for a more old fashioned manual approach. Keep in mind that they may have specific rules about the amount of defaults CCJ’s they will allow.

Gifted Deposit FAQs

What is a Gifted Deposit?

A gifted deposit is money that can help a homebuyer towards buying a property by providing a financial boost towards a deposit. The amount gifted can equate to some or all of the deposit they need and is a financial transaction that doesn’t need to be repaid back to the contributor.

How can gifted deposits help?

A gifted deposit can provide financial support if you are able to pay the monthly repayments but are finding it difficult to save up for the initial deposit. This is normally the case for individuals with a low income. With a gifted deposit, it’s very likely that you will have access to more favourable rates from a mortgage lender.

Who can gift the deposit?

In the majority of cases, birth or adopted parents will gift you the deposit. This option is known as the ‘Bank of Mum & Dad”. Despite this, other family members could contribute too. It does come down to the lender, therefore, it is best that you speak to a Mortgage Advisor in Doncaster, if that is the case.

Do your parents know you need help?

Through our experience providing Mortgage Advice in Doncaster, we do find that customers are unaware that their parents can financially support them with getting a mortgage. In some cases, customers don’t feel they can ask their parents for help. It’s very likely that parents will help you as it’s a significant event in their lives and will want to contribute through a gifted deposit.

Overall, taking out a mortgage can save you more money each month compared to renting. Depending on your situation, you could be paying a lot less per month.

In many cases, the deposit that is gifted usually is from an inheritance, however, you may find that your parents will gift it a lot earlier as long as they have enough money saved or have released equity from their own home.

Gifted Deposit VS Loans

Many mortgage lenders sometimes won’t agree to accept a loan as a way of paying off your deposit. Normally, the lender will not be so sure if you are able to afford paying both at the same time.

Is there a maximum or minimum gifted amount?

Even though this isn’t an exact limit to the amount that can be gifted to a home buyer, it’s best to keep in mind that some lenders will want you to have at least 5% from your own savings.

The rule of thumb is the more you can be able to put down, through combining savings and gifted deposit, the more favourable deals you have access to.

Who can benefit from a gifted deposit?

Gifted deposits are a huge benefit and are popular amongst First Time Buyers in Doncaster and Home Movers.

Furthermore, a gifted deposit will cover the initial 5% deposit for the Help to Buy Equity Loan Scheme. This does depend on the mortgage lender though.  

What proof is required?

 If you do receive a gifted deposit, the donor will need to sign a form declaring that it is not a loan and is a gift. Other bits of proof like ID, address and bank statements may be needed.

Our Mortgage Advice Service in Doncaster