What to do if Your Mortgage has Been Declined on Affordability
See how expert advice could still secure your mortgage with the right lender, even if you've been declined before
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Having a mortgage declined on affordability grounds can feel like a heavy blow to your homeownership ambitions, but it’s important to remember that there could be ways to salvage them, and you’ve come to the right place to find out what they are.
In this guide, you’ll learn…
- What to do if you’ve been rejected for a mortgage because of affordability
- How to find a lender who’s more likely to approve you based on your income and outgoings
- And how a mortgage broker can help you out in this situation.
But rest assured, being declined due to affordability is more common than you may think, and just because one lender has declined your application, doesn’t mean others will too.
What to do if you’ve had a mortgage declined because of affordability
First and foremost, don’t give up hope. It’s only natural to feel upset and disappointed if this has happened to you, but don’t lose sight of the fact that being declined for a mortgage because of affordability isn’t the same thing as being unable to afford a mortgage.
Not every mortgage lender calculates affordability in the same way, so being declined by one doesn’t necessarily mean things will go the same way with another.
If you’ve had a mortgage application rejected because of affordability here are the steps to take to boost your chances of still getting the finance you need…
- Don’t re-apply straight away
Although there might be other lenders who would be willing to approve you based on your income and outgoings, seeking one out straight away could be detrimental. Too many applications in a short space of time can reflect negatively on your credit report and jeopardise future finance applications.
- Get the right advice as soon as possible
A quick enquiry with us is all it takes to be matched with a mortgage broker who specialises in securing mortgage applications that have previously been declined. You can speak to them today to find out what your options are and how to maximise your chances of passing the lender’s affordability checks the second time around.
- Let your broker find a deal right for you
Your mortgage broker will take it from here. If there are grounds to appeal against the lender’s decision to decline you on affordability, they’ll take the lead on that, but they will also explore whether finding another lender who assesses affordability differently is your best option.
Why mortgage applications are rejected on affordability grounds
So a mortgage lender has told you they’re declining your application because you failed their affordability assessment. But what does that actually mean?
Here we have outlined why mortgage applications are declined on affordability grounds, and why that shouldn’t be the end of your homeownership aspirations…
You may not have enough income
This is the most obvious reason why an application has failed the affordability checks, but if a lender has told you this is the case, what they might really mean is that your salary doesn’t stretch far enough in line with the income multiples they based their mortgage offers on.
Most mortgage providers offer mortgages based on 4.5 times the applicant’s salary, but keep in mind that there are brokers in our network who can help you find a lender who uses higher income multiples than this. While you might have been rejected because 4.5 times your salary doesn’t amount to a high enough mortgage for your needs, a lender offering 5 times income, or six times income, could give you a potential lifeline.
Find out what you maximum borrowing could be based on these income multiples by using our mortgage calculator
Mortgage Affordability Calculator
Our affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
Your outgoings could be too high
Mortgage lenders will look at your debt-to-income ratio when carrying out their affordability checks. This is basically your fixed outgoings offset against your income so the lender can see how much money you have left over after your usual financial commitments.
Having significant outgoings can affect the amount you’re able to borrow, but this is usually assessed on a case-by-case basis. There is no specific percentage your debt to income ratio needs to be to qualify for a mortgage, so if a lender told you your’s was too high, there’s always a chance a broker can find you another one with a different policy on this.
The lender won’t recognise your total income
Perhaps you were relying on other sources of income alongside your main salary to bulk up your affordability? Some mortgage lenders aren’t keen on this while others will only let you declare a capped percentage of things like bonuses, commission or benefits.
But the good news is that there are lenders who may let you declare 100% of any…
- Bonuses, commission or overtime
- Investment income
- Rental income
- Retirement income
- And any other legal source of capital you have
Your financial position is considered unsustainable
Mortgage lenders don’t just look at your current income and outgoings when assessing affordability, they’re also interested in how they might change in the future. If they have any reason to believe that your circumstances might change or you’d struggle to cope with an interest rates hike, they might reject your mortgage application.
If this has happened to you, the thing to remember is that every mortgage lender has a different appetite for risk, and there’s a good chance you approached one where it wasn’t high enough – speak to a broker to be matched with one who is better placed to help you.
Get advice from a declined mortgages expert
Get expert advice immediately if...
- You’ve had 1 or more mortgage applications declined
- You’ve been told you’re unable to ‘afford’ your mortgage
- You’re using a single source income
- You earn some of your income in benefits, commission or rental income
- You have high outgoings
If one or more of the above applies to you, it’s important to get expert advice before making an application.
How we got Lauren's mortgage approved!
"Being a single mum I really struggled to find a mortgage on my income alone. I didn't match most lenders affordability criteria even though I could afford my rent fine at the time! I was so frustrated, but luckily Ellen my broker found me a deal with a building society I'd never heard of, but were willing to accept me."
What to do if you can’t remortgage because of affordability
This is a common scenario that homeowners find themselves in if their circumstances have changed since they took out their original mortgage. If your income has fallen or your outgoings have increased at any point during the mortgage term, it might be the case that you no longer meet your current mortgage provider’s affordability criteria.
If you’ve been declined for a remortgage on affordability grounds, making a quick enquiry with us could provide you with an immediate fall-back solution. We can match you with a broker who specialises in salvaging remortgage applications just like yours.
A specialist broker from our network can help you out by pairing you with a lender who…
- Offers remortgages based on higher income multiples
- Approves customers with higher debt-to-income ratios
- Accepts any supplemental sources of income you might have
- Has a higher appetite for risk than high street lenders
If you were declined for a remortgage because of affordability there’s a good chance that you either approached the wrong lender or used the wrong mortgage broker. But by using our free broker-matching service, you can rest assured that the expert we handpick for you will find you the remortgage lender where your income goes furthest.
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Article key takeaways
You may pass other lenders affordability checksMost lenders offer mortgages based on 4.5 times salary, but it may be possible to find an alternative mortgage provider who stretches to 5 or 6 times income. There are also lenders who have a higher appetite for risk and accept supplemental income sources.
The right mortgage broker can find a suitable lenderIf you’ve been declined once on affordability grounds, your best option is to find a mortgage broker who specialises in customers who are looking for a second chance at mortgage approval. They will explore whether you might have grounds to appeal against the lender’s decision and search the entire market for an alternative lender.
Going it alone is riskyIf you’ve already been declined on affordability, the last thing you want is negative marks on your credit report, and that’s exactly what you end up with if you go it alone and re-apply without seeking specialist advice. The right broker can significantly improve your chances of a better outcome next time.
We can help you find a quick solutionWe understand that timing is of the essence if you’re planning to buy a home and a mortgage rejection has held things up. This is why we designed our free broker-matching service to be as simple and quick as possible - 0808 189 2301 or make an enquiry and we’ll set up a free, no-obligation chat between you and an actual human being with the expertise you need today.
I found Online Mortgage Advisor on google after L&C gave up on me and said they couldn't do anything to help me get a mortgage because of affordability. They referred me to Create Finance and the broker found me a suitable deal for my circumstances and a complete offer all within 15 days.
Halifax said they wouldn't touch me
I needed to remortgage to consolidate debts. Halifax said they wouldn't touch me because I had 2 new credit cards and late payments on my credit report. OnlineMortgageAdvisor took some details and within 24hrs had secured an Agreement in Principle elsewhere, at a better rate than I have with Halifax
Pauline Jones-Long - 2 months ago
Remortgage offer and 24 hour response
My own bank of 30 years said they could not help me due to my particular circumstances, I turned to OMA who contacted me moments after I explained the the whole matter online. Graham was very patient and professional clarifying the situation and a day later I had a remortgage offer. Highly recommend
Howard J Buckinghamshire
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No. Mortgage lenders are legally obliged to assess affordability before offering a mortgage under the industry’s latest responsible lending guidelines. In the past, self-employed people with limited or no proof of income could apply for a type of mortgage called a ‘self-cert mortgage’, but this type of finance has since disappeared from the UK market.
For the same reasons we’ve discussed in this article, such as not earning enough or having too many outgoings. But it might also be the case that they approached the wrong lender.
Lenders have different ways of assessing self-employed income and if, for example, you could afford a mortgage based only on your retained profits, a high street lender might not have been able to cater for this, while a specialist mortgage provider would have.
Affordability for self-employed applicants is often based on an average of their earnings from the last 2-3 years, but your borrowing power might increase if you were to be paired with a lender who bases their mortgages on your last 12 month’s accounts.
Depending on the age, severity and reason for your bad credit, it can affect your mortgage eligibility and might mean you have to put down extra deposit or settle for a higher rate.
Bad credit only affects affordability directly if a significant amount of your outgoings is being spent on debt repayments such as an IVA or a CCJ. If this is the case, then the mortgage lender is likely to take this into account when reviewing your debt-to-income ratio.