Can’t Get a Mortgage? Here’s What To Do Next

In this article, we’ll outline the main reasons someone might think they can’t get a mortgage and how, with the help of an experienced mortgage broker, it is still possible to secure the borrowing you need to buy the property you want.

What to do if you can’t get a mortgage

In our experience, there aren’t many people who truly can’t get a mortgage.

However, there are lots of people who either:

• Believe they aren’t eligible for a mortgage (perhaps they’ve had a bad credit issue in the past or have only recently become self-employed and don’t yet have a strong enough trading history)
• Who have been declined for a mortgage (or several mortgages) in the past and now think it’s impossible

We’ve helped countless people who fit into these categories to get mortgage approval, and we can help you, too, if you follow these steps:

Step One: Identify the reason

This could be an aspect of your financial situation or something to do with the property itself. It’s essential to pinpoint the exact reason rather than generalizing, like “house prices are too expensive” or “mortgage rates are too high.” This article covers some of the most common reasons.

Step Two: Speak to an expert

Seek further information and independent, personalised advice from an expert. The more they’ve worked with people in your situation (for example, applicants with bad credit or self-employed applicants), the more insight and clarity they can provide. Contact us if you’d like us to match you with a specialist we work with.

Step Three: Find the solution

Whatever the reason you’re struggling to get a mortgage, an expert can almost always find a way to address it. Some ways take time, like saving a larger deposit, but some are practically instant, like applying to a lender with different eligibility requirements.

Common reasons people think they can’t get a mortgage

Most of the people we speak to feel that they can’t get a mortgage for one of the following reasons:

You have bad credit

Many people assume they won’t be able to get a mortgage with bad credit. You may already have been declined by a mainstream lender for this reason. However, you can still apply to a specialist bad credit mortgage provider who will look at your situation differently.

Their policies are far more flexible, so they can take into account various additional factors, such as the severity of your credit issues, the time that has passed since, and whether there were mitigating circumstances.

You’re self-employed

There’s a common misconception that you can’t get a mortgage if you’re self-employed. The truth is that most lenders have no issue with self-employed applicants, but it can be a minefield as no two lenders will assess your affordability in the same way.

While employed applicants typically have the same income every month (and can, therefore, prove their income with three recent payslips), self-employed applicants often have a much more variable income pattern. Looking at three months could be very misleading.

So, lenders will often ask to see two years of accounts or tax calculations. If you haven’t been in business that long or haven’t been diligent about keeping records, you might not have two years of accounts available.

Luckily, some lenders will consider your application based on just one year’s accounts and sometimes even less.

You’re an older borrower.

You might assume there’s a universal maximum age for mortgage borrowers (many think it’s 75). The truth is that each lender is free to set their maximum age, and they do so in different ways:

• Some have a maximum age at the time of your application, ranging between 55 and 89
• Some have a maximum age at the end of your mortgage term, ranging between 70 and 95
• Others have no maximum age at any point, as long as you can prove you’ll receive sufficient income throughout your mortgage to afford the repayments (for example, using your pension income)

As you can see, applying to the wrong lender could mean that you’re declined based on age, even in your forties, while applying to the right lender could mean that age has no impact on your application. Read more on our Mortgages for Older Borrowers page.

You have a low income.

Again, many people believe there is a universal minimum income to get a mortgage. In fact, out of around 70 available lenders in the UK, only 20 have a minimum income requirement ranging from £13,000 to £25,000. However, your income will still dictate how much you can borrow, but having a low income does not necessarily mean you can’t get a mortgage.

You have a low deposit.

There’s an old rule of thumb that you need a 10% deposit to buy a home, so many people with less than that think they won’t get a mortgage. More than half of all UK lenders will lend up to 95% of the property value so that you can get a mortgage with just a 5% deposit.

Your property is unmortgageable.

Suppose a property is uninhabitable (such as without a fully functioning roof, bathroom, or electricity system). In that case, it is usually unmortgageable, though you could consider another type of financing, such as a bridging loan.

 In all other cases, you can likely find a lender who’ll provide a mortgage, even if the property:

• It has a timber frame
• It is made of concrete
• It has a flat roof
• Is above or next to a commercial premises
• It is in a high-rise block

Not all lenders provide mortgages for all these property types so that you may have been declined previously. This doesn’t mean you can’t get a mortgage; it’s just that you haven’t yet found the right lender.

How a broker can help if you can’t get a mortgage

An experienced broker who has whole of market access, just like the ones we work with, can help you to:

• Understand why you can’t get a mortgage (or why you’ve been declined) and what steps you need to take next
• Find a specialist lender who understands the complexities of your situation
• Maximise your borrowing by identifying lenders who offer high-income multiples
• Renegotiate with lenders if you’ve been declined in the past
• Make your application strong and error-free to avoid any more rejections

What to do if you can’t get a big enough mortgage

Lenders generally use income multiples to decide the maximum amount you can borrow. While many will only lend you up to 4.5 times your annual income, others may lend five times your annual income. So, applying to the right lender might allow you to increase your borrowing.

If you speak to a broker, you may also be able to increase your borrowing by reporting your income from sources other than salary. For example, you may not be aware that some lenders will include commission and bonus income in their calculations. Others might consider your benefit income, lodger income, or spousal support.

Get matched with a broker to maximise your chances of success

Speaking to the right broker is crucial if you can’t get a mortgage. For example, if you have bad credit, brokers who offer restricted advice and are limited to one provider may be unable to help you. The brokers we work with, who are trained and vetted by us and have the whole of market access, are far more able to find the right lender.

We work with numerous brokers who specialise in different areas, including high-income multiple mortgages and various other complex home loans, and who can give you expert advice. To get matched with a broker, call us on 0330 818 7026 or inquire online.