At Mortgage Success, we are proud of our Application to Offer ratio, so we thought it would be a good idea to post the figures.
Most Mortgage Brokers will tell you about their positive experiences, whether that be getting an offer issued in a few hours or getting a complicated case through – we have plenty of those you can read here.
But what about the Mortgage applications that dont go to plan?
Mortgage Declined
Unfortunately we do have them like every other broker will. This year (2020) despite being one of our busiest years ever and with everything happening in the world which in turn has resulted in lenders being more cautious than they have been in many years, we have at the time of writing this post, only had 2 applications declined.
Declined by High street lender
Our first declined application in 2020 was a couple who applied for a Mortgage in February. They were customers we had helped to buy their home 2 years previously. They now wanted to move into a more expensive property. The Decision in Principle (DIP) passed, but between doing the DIP and the application, Covid hit. The application was subsequently declined by the underwriter.
We do not know the reason for the decline but I suspect it was a combination of a previous Bankruptcy, a gifted deposit, stretching affordability and that Covid-19 was looking quite serious resulting in the lender being more cautious than when we did the original DIP.
The good news however was that we were able to get them a Mortgage with another lender, albeit around 0.5% more expensive and the couple are now in their new home.
Building Society declined application
Our Second declined application in 2020 was a couple who had been recommended to us from one of our customers we had previously done a Mortgage for.
Their application was not declined on the basis of it being a bad application, it was declined due to the valuation. The surveyor decided that the property was not suitable security for the lender. The customers themselves were accepted by the lender and if they were prepared to look at another property, we would have had the mortgage offer issued.
Unfortunately the property they had found was THE property they wanted. If it was not this property, they did not want another.
After looking at the situation again following the blow on the valuation, we were able to help them with a mortgage secured against their residential property, that then enabled them to in essence purchase this new property for cash, with a mortgage secured against their home, rather than their new holiday home.
And that’s your lot.
Summary
In the whole of 2020, we have had 2 applications declined, both of which we still managed to help, we just had to look at alternative lenders or restructure how we raised the money.
As I said at the beginning, this is something I am proud of. When thinking about this post I was a little reluctant to make a negative post, but I think when you consider of all of the applications we have submitted and what has happened this year with Covid, we have not had to tell a single applicant we can not get them a Mortgage.
Yes we have had set backs, but we have always managed to find a solution and I think that is something we should be telling everyone about.
Mortgage applications can be very complicated and even time consuming, there are things that can catch us out – such as lenders risk appetites or problems with properties that we could never have avoided, but we always try to find an alternative solution and so far this year we have managed to do that.