The first thing you are likely to do if you have your application or decision in principle declined is to panic. But hold off doing that. Applications get declined all the time, the important thing is to try and understand why it was not accepted.
Do we know why you are struggling?
It is always helpful if we know the reason. It can help to save time at the research stage if we know where to start looking. When we ask if you know why your application is proving to be difficult, you might have an idea. However, if you dont you still do not need to panic.
Typically the reason for the decline will fall in to one of the reasons below.
- Credit history,
- Affordability,
- The property,
- Failing the credit score or,
- Is it a combination of things?
It might be that you do not know the reason for the decline. If thats the case, try not to worry. We will go through your situation with you and try to work it out. If we cant work it out, then we will proceed as we would normally. If we then get a decline, we may be able to get more information via our account managers and that can help us with the next application.
What information do we need?
If we have a phone call, we normally ask a few basic questions:
- Purchase price/Property value,
- Mortgage amount,
- Income(s),
- Debt(s)/Commitments (this could be loans, credit cards, child maintenance, student loans etc),
- Any bad credit.
With these we can quickly determine, if it is likely to pass affordability, if it is likely to pass a credit check and in the case of bad credit what size deposit you will need and an idea of rates.
However before we apply for a Decision in Principle (also known as a Mortgage in Principle or an Agreement in principle) we need 2 things:
- A factfind – this is a document which we use to get everything down on paper in one place,
- A credit report.
We also ask you be completely open with us. Trying to hide the problem wont help, it nearly always comes out down the line. So to save yourself the anxiety of whether it will get found out, potential delays and costs if it does get found out. It is safer to just be open with us. I only write this because it does happen where people try to hide the bad stuff.
Speak to a broker
I could go all salesy here and say call us. But most brokers will be experienced in overcoming some complications. We tend to specialise in bad credit so I think from that perspective we are in a good place to help. But we like all the quirky things – extra points if another broker has told you it cant be done!
A mortgage brokers job is not to find the cheapest rates, you do not need a broker for that. Yes, some brokers will do that (typically the larger firms or the ones based in the larger corporate estate agents), but our job is so much more. We are there to hold your hand, we are of course here to try and get you the best rates possible, but more importantly we are there to get you a mortgage. We want to get you from Start to finish as quickly and easily as possible with the best product.
Not all applications are straight forward. Even after 13 years we still get declined applications. But if that happens, we either argue it and get it overturned or we go to plan B.
In general we only get maybe 2 declined applications a year so it is not often. As much as I would like to think we are perfect, we are only human.