Mortgage Agreed in Principle and then Declined

What do you do if your mortgage gets agreed in principle, ie you receive a DIP and then declined at full application? This is something that crops up with a lot of people who get in touch with us. Some may have gone direct to the bank, others may have gone via another broker.

In any event it is not necessarily the end of the world so do not panic just yet. This article will look at what can be done to help you still get a Mortgage.

Common reasons for a declined application

In an ideal world we would try to understand why it was declined. This could be any number of things, a few examples are:

🟢  Mistakes – It sounds obvious, but this could be as simple as undeclared debt or your credit report still showing older information (always check this is up to date before starting any applications). Firstly, check the application form, is everything on there correct? If so, have you checked your credit reports? Do not forget, there are 3 credit reports. Different lenders use different reports. They could be picking up something you are not seeing, so it is worth getting all 3 credit reports.

🟢 Missing information – A Mortgage in Principle often only asks for basic information, therefore it is possible that your application was declined based on information not captured in the initial assessment, once included it may have resulted in your full application not hitting the required points needed.

🟢  Automated Decisions – Sometimes, automated systems may decline applications without a specific reason – which only adds to frustrations. If you can, get in touch with the lender to find out why. It’s always worth a try.

Beyond this, we have over a decades worth of experience looking at applications. If none of the above are helping, we would go through everything and try to find out where the problem lies. Occasionally it may not be anything specific and more a combination of little things adding up to become a bigger problem.

What can I do?

Do not worry. Sometimes applications do get declined. The DIP or AIP is exactly that, it is an agreement or decision in principle. It is not a guarantee or a mortgage offer. This does happen, even we get declined applications occasionally (on average around 1-2 per year) but usually we get it placed at the second attempt.

Hopefully we can find out the reason for the decline and use that when looking at other lenders. If not, we would just do the research as we would ordinarily and then look to place the application with another lender.

That being said, I always recall an application where the client had applied to Natwest via another broker. The application was declined. Due to the clients adverse the only alternative we had was a specialist lender. However, I wanted to give Natwest another try as we had a few tricks up our sleeve. The client was reluctant as they did not want another credit check or application declined unnecessarily. Eventually the couple took our advice – 2-3 weeks after being declined, he had been accepted and had a full offer!


Firstly, do not panic!

Secondly, see if you can find out the reason for it. It could well be that there is nothing specific but it may not be.

Lastly, get in touch. We can talk everything through and give you an indication of whether or not we can help. It would always be subject to getting paperwork from you but the last thing we want to do is to waste our time or yours. If we genuinely do not think we can help, we will tell you upfront. But if we know you have previously been declined we can just look a little more thoroughly to try and find the problem.

It is understandable that you may be a little more anxious in part because you have been declined and also because we appreciate the agent may be starting to apply some pressure. We will be extremely thorough when going through everything to try and ensure the next application is a successful one. We dont call ourselves Mortgage Success for nothing! (too cheesy?)