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Can’t get a mortgage

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 21, 2023

Can’t get a mortgage

Mortgages are not like money. Although financing to purchase a property can be difficult, it is possible.

Speak with our mortgage brokers and constitute financial advice today. Our mortgage brokers can offer advice, help with a mortgage application and introduce you to specialist lenders. Don’t be disheartened if you have had a mortgage declined, even if you have poor credit history we will be able to help.

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Help if you can’t get a mortgage

This guide is for people who think they won’t be able to get a mortgage or have had a mortgage declined. It includes first-time buyers, budding landlords, and everyone in between.

Perhaps you have been told “no” by a major mortgage lender. Or maybe you believe you are not eligible for a loan. We can help you with the most common questions we get from customers who believe they aren’t eligible for a mortgage.

For those who are unable to get a mortgage or had a mortgage declined, we offer a complimentary broker-matching service. We will match you with an expert in the whole market who can help you meet your needs.

So you can be sure that you will get the best advice and personalised service, we vet and train every mortgage broker in our network.

Constitute financial advice today to begin a mortgage application. We have a few mortgage providers lending mortgages who will be happy to help you.

 

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I can’t get a mortgage! What should I do?

Send us an enquiry to match you with a specialist mortgage broker who is able to offer whole-of-market financing. A mortgage advisor can help you overcome any obstacles you face on your path to mortgage application success. We work with advisors who can help you overcome any obstacles that may arise.

Your broker will first need to know the reasons that you believe you aren’t eligible for a mortgage. We have helped customers who were turned down by mortgage lenders for financing due to too much debt, poor credit reports and self-employed. People mistakenly believe that this means they are out of luck for homeownership. Some people believe they are not eligible for approval due to factors such as bad credit, income or deposit requirements.

There is so much misinformation that people believe they cannot get a mortgage especially when it comes to credit reference agencies. Below are some common reasons customers believe this, as well as the reasons they may be wrong.

Contact an experienced mortgage broker today, we have a number of specialist lenders available.

Is it true that bad credit can prevent me from getting a mortgage?

Lenders will always look at your credit report. It’s not always true, but it is easy to understand why people believe that a bad credit file will prevent them from getting mortgages. Many high-street mortgage lenders will refuse customers with a bad credit file, particularly if they have had a bankruptcy or repossession, missed payments or gone against a mortgage agreement.

You don’t have to be told that you won’t be able to get a mortgage due to your poor credit rating. The good news is that most mortgage lenders aren’t going the opposite way and credit rating can be worked with.

There are specialist mortgage providers for bad credit. They can base their lender’s criteria decisions on your credit history, age, severity, and cause. They consider the circumstances and give a ‘no’ instead of stating it.

The table below will give you an idea of the options available to you for mortgage financing based on what type of bad credit and how long it has been on your record.

Even if your credit history is not good, you may still be approved by a specialist lender. But only if the lender you approach is right for you. These are the brokers that we work with.

They are familiar with the best mortgage providers to help you obtain a mortgage with your bad credit history. They will ensure that you get introduced to the right lender with a lender criteria you will meet.

 

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I was told that I cannot get a mortgage because of my self-employment. Is this true?

No. No. If you don’t have sufficient proof of income, this could be a problem.

Self-employed mortgage applicants will usually need to provide two-to-three years’ worth of accounts in order to obtain a mortgage. People who don’t have enough trading experience to qualify for a mortgage often find it difficult to get one. This is why many self-employed people feel they are at a dead end.

People in this situation often forget those specialist mortgage lenders have a better understanding of self-employed applicants and their particular needs. These mortgage providers can base a mortgage proposal on 12 months’ accounts or less.

The table below provides a quick summary of the self-employed mortgage options available to you based on how long you have been trading.

If your two-three year accounts are less than, it can be difficult to find a mortgage lender willing to work with you.

Our expert brokers have this knowledge and can help you find the right mortgage lender based on your employment history and trading experience.

I am too old to get a mortgage.

It is almost certain that this is a myth, as there is no upper limit on your ability to get a mortgage. There is no upper age limit, at least not across the board.

While some mortgage lenders won’t lend money to people over 75, others will extend credit to those who are 85 or older. However, there are a few that don’t have any upper age restrictions. These lenders care more about the affordability of the mortgage over the term. For them, age is just a number.

You might think that you are too old to get a mortgage. This could be due to the fact that you have read an article or approached a lender who has strict age limits. The brokers we work alongside can match you with a mortgage broker who specialises in late-life mortgages.

 

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Because of problems with my property, I cannot get a mortgage. What are my options

To find out all your options, you should consult a mortgage broker. But first, think about the possibility that you haven’t found a lender who is right for this complex deal.

Many customers have wrongly believed they couldn’t get a mortgage due to the type of house they are buying. Sometimes, the property falls under the category of ‘non-standard construction’ and the customer has approached a lender who typically only lends money for bricks-and-mortar homes. They might have heard from someone else that non-standard properties cannot be mortgaged.

However, read our guide to learn what is a non-standard construction mortgage and how they work.

Non-standard construction isn’t the only problem that could affect your property. Lenders are cautious about deals that include dampness in the home, Japanese knotweed or an area at high risk of flooding, which would typically require a specialist lender to facilitate a flood zone mortgage.

It is possible to get a mortgage even if these problems are not addressed, but you need to know the right lender. Some mortgage lenders are open to taking on high-risk deals and specialize in dealings involving unusual properties and buildings that have issues.

For more information, see our guide to property types.

I don’t have the funds to pay a mortgage and save enough for a deposit. I need your help.

You can, but you should remember that it is possible to make a mistake and assume you cannot afford a mortgage or have enough money for a deposit. Low-income homeowners can get a mortgage from specialised lenders. They might allow you to borrow 5-6 times your salary instead of the industry average of 4.5.

Mortgage deposit requirements. You might have heard that you cannot get a mortgage with a less than 15% deposit. Or that you were turned down by a lender for not having that amount. It is possible to get a mortgage with only 5-10% if you know the right mortgage provider.

For more information, see our mortgage affordability guide and our low-deposit mortgages article.

 

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What happens if I have a deposit, but cannot get a mortgage?

There are steps that you can take to improve your chances of getting a mortgage if you don’t have enough deposit. These steps can be taken regardless if you are self-employed, have poor credit or make a simple application.

You should not listen to a lender telling you you won’t be able to get a mortgage.

  • Find out why they made that decision. Once this is done, you can examine the root cause and get specific advice on your next steps.
  • Do not re-apply immediately: Too many credit applications in a short time period can cause lenders to be reluctant and could lead to further credit reporting damage. Talk to a broker to get advice about when you should reapply.
  • Pay off all debts that you are able to. If you have fewer outgoings and more debt, your chances of getting mortgage approval might be higher.
  • You can view your credit report and optimise it. These reports will give you an idea of what the lender will find when they do a mortgage credit review. You should carefully go through them and make sure you challenge any errors. For more information, see our guide to building credit and repairing a mortgage to get tips before you apply.
  • Talk to a mortgage broker: No matter what reason you were told that you cannot get a mortgage, talking to a broker from the whole market can increase your chances of getting one. They will advise you on the best time to wait, how to improve your next application, and which lender is right for you. You should remember that the market is huge and you won’t have access to all of their products. Also, you might miss out on better deals elsewhere.
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What happens if I am unable to get a mortgage for my buy-to-let property?

The process for getting a mortgage is the same if you have been told that you cannot get one. Ask the lender why they won’t lend you credit. Then, speak with a mortgage broker to discuss how to get around the problem next time. These can be more difficult to obtain than residential mortgages.

You may have heard that you cannot get a mortgage to buy-to-let for these reasons…

  • Too little deposit: Buy-to-let mortgages typically have higher deposit requirements than residential mortgages. It is possible that you were told that you will not be able to get one with less than 25%. You should keep in mind that lenders may accept a 15% deposit.
  • You haven’t been a property owner long enough.
    Buy-to-let mortgage lenders will only finance borrowers who have had landlord experience. Other lenders will only approve you for an investment mortgage if your homeownership has been continuous for 12 months and you have not missed any payments.
  • The investment is not feasible:
    Buy-to-let lenders care more about the viability and stability of your investment than your personal income. A mortgage lender might have told you that an investment mortgage is not possible because the rental coverage is less than 125-145%.
  • Other factors
    Many of the same factors that we have discussed in this guide in relation to residential mortgage lending also apply to buy-to-let. These include non-standard property types and bad credit. Some lenders may also require a minimum income of £20,000 to £25,000.

Don’t panic if you have been told that you cannot get a buy-to-let mortgage because of any of these reasons. Our specialist brokers may be able to match you with a lender that has lower deposit requirements and is more open to landlords who are inexperienced.

What happens if I don’t have enough money to get a mortgage?

A mortgage lender might only offer you a partial loan amount, instead of the entire amount you need, but it could be possible to get a larger mortgage from a different lender.

First, it is possible that you were told that you are not eligible for the full amount by the lender. This was because they used a lower-income multiple to calculate your borrowing potential. We mentioned that most UK lenders will only lend up to 4/5 times your income. It may be possible to find another lender who can stretch to 5 and 6.

It may also be possible to get a bigger mortgage by re-applying and spreading the debt over a longer-term. Although your monthly payments will be higher than the total interest, the lender might still be willing to accept them.

We have already discussed ways to increase your chances of getting mortgage.

  • Clear any outstanding debts
  • Optimise your credit file
  • Wherever possible, reduce your outgoings

Talk to a broker for personalized advice

What should I do if my buyer is unable to get a mortgage?

You can’t do much if your buyer can’t get a loan, but you can tell them to call us so we can match them up with an expert broker. This could increase their chances.

A chain break is when a prospective buyer fails to obtain a mortgage and you are selling your house. There are options available to wait until another buyer is found.

To help you secure your new house, you might consider a bridge loan. Your exit strategy could be to sell your existing home.

Talk to an expert if you can’t get a mortgage

Don’t despair if you have been told that you aren’t eligible for a mortgage. Our experts have a proven track record of helping clients with complicated circumstances. They’ve helped people who were turned down multiple times for finance.

We won’t charge you a penny to introduce you to the right mortgage broker for your profile and needs. Contact us today.

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