What to Do if Your Mortgage Application Is Declined

Declined Applications are not the end of the road!

If your mortgage application has been rejected, it's understandable to feel disappointed and frustrated, but you're not alone. Declined mortgage applications are more common than you might think, and there are often options to help you turn things around.

In fact, many customers who initially had their mortgage applications rejected simply approached the wrong lender or broker. With the right advice, it’s often possible to salvage your plans and find a better deal, if you use a good Mortgage Broker

Mortgage Application Declined? Here’s What to Do Next…

Rejections happen for all sorts of reasons, and in many cases, there are solutions to get you back on track. Here’s what you can do:

1. Resist the Temptation to Re-apply Right Away

It’s natural to want a quick fix, but re-applying immediately can worsen your situation. Another rejection could further harm your chances. Instead, speak with Mortgage One - we can assess why your application was rejected and find the best solution.

2. Review Your Credit Report

It’s important to consider how reapplying too soon might impact your credit score. Too many requests for finance in a short period can be a red flag for lenders. Take a step back and have a conversation with us first - we’ll find the problem and discuss solutions and options.

3. Seek Expert Advice

Not every broker specialises in helping customers after a mortgage rejection. It's crucial to speak with one who has experience in turning around declined applications. Mortgage One are highly experienced in securing approvals after a rejection.

Common Reasons Why Mortgage Applications Are Rejected

The most common reason for a rejected mortgage application is that the wrong lender was approached. Different lenders have varying criteria, and some are more flexible than others. A specialist broker like Mortgage One can help you find a lender who is more likely to approve your application.

Here are the top reasons mortgage applications are declined:

Income and Affordability Issues

Sometimes, an applicant’s income isn’t enough to pass a lender’s affordability checks, or they may have a complex income type that the lender doesn’t understand. With the right broker, you may find a lender that better understands your income situation.

Bad Credit

Some lenders may immediately decline customers with bad credit, while others are more flexible. If credit issues caused your rejection, a specialist bad credit mortgage broker could help you find a lender that’s willing to overlook those problems.

Deposit Requirements

Many lenders require at least a 10% deposit, and some demand even more for certain property types. If you’ve been rejected due to insufficient deposit, a broker could help you find another lender with more lenient loan-to-value requirements or government support schemes.

Overdrafts

If you're in your overdraft (either arranged or unarranged), some lenders may see this as financial mismanagement. However, there are brokers who specialise in finding lenders willing to approve applicants with overdrafts.

A History of Gambling

Some lenders may reject applicants who have a history of gambling, considering them too risky. If this has happened to you, we can work with you to find a lender who has higher risk tolerance and may still be able to approve your mortgage.

Declined After Contract Exchange or Valuation

It’s not uncommon for a mortgage to be declined after a lender has valued the property or even after contract exchange. If this happens, don’t panic—there are still options available. A broker can help you explore alternatives, whether it’s renegotiating with the original lender or finding a new one.