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Had a Mortgage Application Declined?

See how expert advice could still secure your mortgage despite being refused elsewhere

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: July 6, 2021

If your mortgage has been declined, there are many different actions you can take to understand why it was rejected and how to improve your chances for next time.

When you apply for a mortgage, the mortgage applications are assessed based on the lending criteria, the specifics will vary from lender-to-lender. So just because your application was rejected by one lender, this doesn’t mean that it will happen with another.

Because the criteria will vary between lenders it’s worth looking around to find the best deal for your circumstances, and the experts we work with can assist you with this.

In the meantime, we’ve put together this article where we focus on the various reasons why a UK mortgage may have been declined.

My mortgage has been declined: what do I do next?

There will be an infinite number of reasons as to why your mortgage application has been declined, though most of the time it’ll be because the lender wasn’t happy about a few specific things, including:

Getting declined a mortgage in principle usually means that the minimum criteria haven’t been met. You can find out some of the potential reasons why in the section below.

Thankfully, every lender has a different policy on what is and isn’t acceptable, and many specialise in certain areas, so just because one lender has turned you down previously, doesn’t mean there isn’t a lender out there for you.

To boost your chances of getting a better mortgage next time, speak with one of the expert whole-of-market brokers we work with.

What can I do if I’ve been declined a mortgage in principle?

If you’ve had a mortgage in pre-approval then declined, this is usually because you haven’t passed the lender’s internal credit score. Every lender uses its own scoring system to interpret every factor of the application and has its own ‘pass mark’ that they require applicants to achieve in order to be approved.

Many specialist mortgage lenders will have more flexible rules when it comes to something fundamental holding the approval back, and some even have no credit score system at all – they assess each case manually.

Make an enquiry for a free, no-obligation chat and we’ll match you with an expert who has experience with a declined agreement in principal queries.

Why was my mortgage declined after an agreement in principle?

There may be a whole range of reasons you’ve not met their minimum lending criteria to get a mortgage in principle that may be acceptable with other lenders, for example:

  • Recent bad credit events
  • Having a high loan-to-value (LTV)
  • Having a high loan-to-income (LTI)
  • You’ve not been employed for long enough (Not all lenders accept new job mortgages)
  • You don’t have a long enough address history (at least three years in many cases)
  • You haven’t registered on the electoral roll at your current address
  • Your deposit has come from a gift and not from savings, or you haven’t contributed any funds to even partially match the gifted deposit
  • Lying on your application (in the most serious of cases, you could even be committing fraud)

If you’ve had a declined mortgage in principle for any of these reasons and more, you still have other options even with a bad credit mortgage.

If you’ve been refused a mortgage after an initial agreement in principle, the outlook is usually far better than if you’ve never been approved.

Often the reason for a full mortgage decline is because your lender is inflexible with certain specifics. Your broker may have failed to do their homework before submitting your application, meaning you ended up applying with the wrong lender that would never have approved the mortgage in the first place.

Typically, mortgages declined on the full application can be rescued if your broker knows what they are doing.

Why have I been accepted then declined?

Usually being denied a mortgage after pre-approval will be for one of two reasons:

  1. Adverse Credit

    If a lender has taken a deeper look at your application and has picked up undisclosed adverse credit information, this may be one of the reasons why you were denied after the application in principle stage.

    Lenders can be strict with non-disclosure because it can appear as though the borrower is lying in order to make their application stand out.

    Bad mortgage brokers won’t do their research before sending off an application to a lender in the hope that the lender won’t find any issues. Good brokers, on the other hand, do their homework and find a lender who will accept adversities. They understand that if the adverse is not disclosed when the lender finds them, the application will be declined when it would have been approved had the issues been disclosed from the outset.

    Adverse issues can be overcome because there are lenders who are happy to consider a bad credit mortgage, including mortgages with a CCJ, recent late paymentsdefaults and even repossessions and bankruptcies.

  2. You didn’t meet their policy criteria

    On review, some mortgage underwriters will decline an application because of their policy. This may be because you haven’t been in your job long enough, or perhaps they are not happy with the recent use of payday loans, for example.

    If you’ve been declined simply based on a policy reason, this is usually good news because it means you were deemed creditworthy and passed the initial credit scoring system, but then had the mortgage declined at the full application stage for some other specific criteria that many other lenders may be happy with.

What can I do when I’ve been declined after an agreement in principal?

Firstly, you need to establish what went wrong. This can sometimes be done by talking with the lender and asking them for more information. They may not tell you the exact reason if it’s due to a credit issue, as data protection laws often restrict their access to that information. Instead, they’ll advise you to check your credit reports or hide behind the excuse of ‘not met credit score’.

That said, it’s always a good idea for you and your broker to push them on it, because if there was a policy reason (i.e. not happy with length of time in a job or deposit source), it’s often something another lender would be happy with.

If you’re struggling to get feedback from the lender, don’t worry. The specialists we work with can often tell you why your mortgage was declined after an application in principle without even talking to the lenders. You can even get a comprehensive credit check for free, and it won’t affect your credit rating.

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Mortgage declined by underwriter

Having your mortgage declined at the underwriting stage, when you already have an agreement in principle, can be frustrating. It can happen when the underwriter finds an issue with your application which causes concern. Sometimes this can be resolved with the help of your broker who can speak with the underwriter and work to get things back on course.

If you’ve had an agreement in principle with a lender already approved but then your full mortgage application was rejected at the underwriting stage, it’s likely that the lender’s UK underwriters were not happy with either:

  • Something undisclosed in your credit history,
  • Something on the application form,
  • Documents you’ve supplied not being acceptable,
  • Income used not being acceptable,
  • The feasibility/reason for the mortgage,
  • Their attitude toward how risky the case is overall.

It’s important to remember that every lender is different. Underwriters exist to decide if you are a ‘good risk’ and will generally look to lend money where this is within reason. However, they are limited to the policy guidelines of the lender they work for, and it’s rare that underwriters are given a mandate to consider cases that fall too far away from the lenders’ core business.

This can bring about some interesting and often puzzling decisions where it’s apparent the customer is creditworthy, but certain rules in the policy say otherwise and the mortgage is rejected.

For instance, it might seem fine to lend £100,000 to a self-employed borrower of one year earning £1 million, but if the lending policy requires applicants to have 2- or 3-years trading, the case would likely be declined.

There’s a lender out there for almost every buyer – the trick is knowing where to look and how to package the application in the right way to give underwriters the opportunity to approve the case. Luckily for you, the expert brokers we work with can do this.

Appealing a declined mortgage

Unfortunately for many borrowers, appealing a mortgage that has been declined by an underwriter is often futile.

Without good reason or any further evidence to support a positive decision that wasn’t known at the point of review, the underwriters will very rarely overturn negative decisions. Instead, it might be a better idea to seek an alternative lender with a slightly different policy who is likely to take a different view on the reasons for the decline.

Mortgage refused after valuation

Your mortgage lender will carry out their own valuation of the property you want to buy. If your mortgage is declined at this stage, it’s likely to be because something on the valuation report has either down-valued the property or flagged up concerns that make the lender question its suitability as security.

Properties can be deemed unsuitable if the construction and material type is not within the lender’s policy, or because it is not structurally sound and needs significant repair work before it’s habitable.

Down-valuations are hard to do anything about, without specific comparable properties of a similar construction that have sold recently in the area.

Properties that aren’t considered an acceptable construction type with one lender may still be acceptable with another – again, it’s always best to check with the lender before making an application if you think the property may not be suitable to avoid last-minute mortgage declines and incurring significant valuation fees.

Mortgage declined after exchange of contracts

Having a mortgage fall through after exchanging contracts is extremely rare, though it can sometimes happen. The good news is that there are still lenders who can offer a mortgage after being declined late on in the process.

There may be many reasons why a lender would decide to refuse at this state in your application, though at this point they would already be happy with the income, deposit, credit score and property, and usually, the reason for the decline is due to some historical adverse credit.

By rights, your advisor should be making everything apparent to the lender before you even make the application, followed by a thorough mortgage credit check to make sure that nothing has been disclosed. So, if you have any adverse credit the lender should know about it already and there should be no unexpected surprises.

Sometimes, however, if the adverse credit was not disclosed from the outset, it can be that it isn’t picked up on the credit search (such as IVAsbankruptcy etc.), which can happen if the lender predominantly uses Experian and the credit issues only show on the Equifax report. If these credit issues come to light and are outside of the lender’s policy, then they are within their rights to withdraw any formal offer to lend, which can be after the exchange of contracts.

Make an enquiry for a free, no-obligation chat and speak to one of the experts we work with. We’ll match you with a broker experienced in arranging mortgages that have been declined previously.

Mortgage declined at the last minute

It shouldn’t get to the stage where you’re ready to exchange contracts and complete on a purchase before it becomes apparent your mortgage is not ready. Sadly, this happens more than you might think, though you can take action to address the issue straight away.

Mortgage declined after a full offer was made

Lenders have the right to decline any mortgage application up until the point of completion, even after a full offer was made. This tends to happen if you don’t meet the lending criteria, or they find an error in your application (for example incorrect income, address history etc.). It could also be due to adverse credit that wasn’t disclosed at the start of the application.

My mortgage was refused due to a low credit score: What do I do?

If you’ve had a mortgage declined due to a low credit score, that doesn’t mean you can’t get a mortgage from another lender.

Low scores are caused by a whole number of things, not just bad credit events on your file. There are even specialist lenders who don’t use scoring systems, so you’ll be far more likely to find a better deal with them.

These are some of the most common enquiries we come across when it comes to low credit scores, all of which are perfectly acceptable by lenders in the market.

Being declined a mortgage for…

  • Not being on the electoral roll
  • Being in your overdraft
  • Having a high level of borrowing
  • Only starting a new job recently
  • Having a small deposit
  • Having a high-risk job (such as roofers, truck drivers, farmers etc.).

The brokers we work with can guide you through your credit history and where you can improve – and it’s completely free.

What to do if your mortgage is refused due to bad credit

If you’ve been refused a mortgage with bad credit the good news is that there are lenders available who can accept the following from potential buyers:

If you do have a history of poor credit, you’ll need to define exactly what these factors are before trying to find a mortgage lender to consider your application.

By working with an advisor, they can use their extensive list of contacts to find more flexible lenders. The expert you work with will need to know:

  • How many late payments/defaults/CCJs you have
  • If you’ve had a bankruptcy
  • The exact dates of a registration or discharge, and the sum involved
  • If you’re in a debt management plan, including when it started, how much you owe, which creditors are involved, and what your conduct on the plan has been.

How can I improve my credit?

To see where you need to improve, it’s worth understanding how your credit report works. Your credit score is compiled by credit referencing agencies (CRAs), and the three main agencies in the UK are Experian, Equifax and Callcredit.

Because lenders report to different CRAs, your scores may be slightly different, so it’s a good idea to check that they all match up. For a better overview of your credit, Check My File compiles your credit reports into one easy-to-read breakdown. You can get a one-month free trial (£14.99 per month onwards), however, we can do this for you for free at any time.

You can get your free credit report here.

Will a declined mortgage affect my credit?

Unfortunately, if you’ve applied for a mortgage only for it to be rejected by a lender, a hard credit search would have been made against you and it will stay on your record for 12 months.

Also, multiple hard credit searches within a short space of time could also affect you negatively, so if you apply for another mortgage without preparing yourself adequately or not addressing any outstanding issues could leave you with another rejection and possible wasted application fees.

Declined mortgages only tend to happen if the broker you were working with didn’t properly prepare your application before submission, as a good broker would be able to spot any potential issues or factors that wouldn’t meet the lending criteria and work with you to boost your application.

While you can apply for another mortgage after you’ve been declined, it might be worth your while to take your time and identify any factors that you can improve. Lenders will also be more favourable to rejected applicants if they wait three months before applying again.


If you've been declined by a lender, it doesn't mean other lenders wouldn't be willing to accept your application. Expert brokers have access to more lenders and more options,

What to do if your mortgage is declined due to income and affordability

‘Acceptable’ forms of income can be a fluid concept and is completely different depending which lender you pick.

Some lenders won’t give any leeway on one factor, but may completely ignore another; some calculate averages, some use absolute figures; some require a long working history and a permanent contract, others will accept a mortgage while in a probationary period or even based on a future contract you haven’t started yet.

If your income is made up of multiple streams, is unique, or is ‘out of the norm’, you may need to work with a specialist broker with expertise in this area.

Affordability wise, mortgage lenders all use their own systems to establish feasible maximum borrowing levels. Some are old-school and work from income multiple calculations, simply taking your annual salary and multiplying it by 34 or 5. Others will approach it by calculating what’s affordable month-to-month and factor in rate increases as a ‘stress test’.

In general, mortgage lending is capped at around 4x annual income with a few specific lenders stretching up to 5x.

Occasionally, this can be increased over 5x on a case-by-case discretionary basis for those with higher incomes and large loans. For this reason, selecting the right lender can make a huge difference to the maximum you can borrow.

By working with an experienced broker, they can assess your affordability to see which lenders would be best suited for you.

Example of commission and affordability

A salesman on a basic salary of £20k and annual commissions of £60k earns £80k a year, but in trying to borrow as much as possible he finds that many lenders only accept 50% of his commission.

Let’s say lender A is one of these, and therefore considers him to have a £50k annual income. To help with the search, he approaches a decent broker who tells him that some lenders are more generous and accept 80% of commission (some may even go higher than this), and so lender B would consider income to be £68,000.

If both lenders offer up to 5x income, then the maximum borrowing with lender A would be £250k, but lender B would go up to £340k – a big difference, especially if you live in an area with higher house prices.

What can I do if I’m self-employed and have been declined?

Don’t despair, there are some specialist lenders who are very accommodating to self-employed borrowers and it isn’t impossible to find the right mortgage, even if you’ve been declined by another mortgage provider.

Self-employed borrowers have had it tough when it comes to borrowing since the old Financial Services Authority put a stop to self-cert mortgages, and with the market review changes in April 2014, lender criteria has tightened.

However, this has created gaps in the market that certain specialist lenders have been quick to fill, and there are lenders that are happy to offer mortgages even in the following circumstances:

Get in touch and we’ll match you with an expert broker who specialises in helping self-employed customers secure mortgage lending.

What to do if you’re purchasing your first home and your mortgage is refused

It’s rare that mortgages are declined specifically because the applicant is a first-time buyer. A refusal in these circumstances is usually down to something else the lender isn’t happy about, such as bad credit or affordability.

Occasionally, some lenders will place additional requirements on borrowers who have never owned a property before, for instance certain high street lenders will stipulate that all first-time buyers must have a minimum annual income of £20,000, and some specialist lenders who consider adverse credit for first-time buyers demand a higher income than that to try and offset some of the additional risk associated with lending to them.

First-time buyer, buy-to-let mortgages are a unique mortgage proposition and often come with certain specific criteria that first-time buyers have to meet in order to gain approval. This is largely in part to the recent crackdown on buyers taking buy-to-let (BTL) mortgages on a property they intend to live in, when they cannot afford their own residential deal.

First-time buyers looking to get a buy-to-let mortgage will need to prove they can afford the loan as if it were a residential. They are also tested for further feasibility in more depth than homeowners and experienced landlords, because lenders may be concerned as to why someone would buy for an investment and continue to pay rent on their own residence.

What to do if your buy-to-let mortgage application is rejected

Buy-to-let borrowing has also tightened up since self-employed self-cert mortgages disappeared and since the market review changes in April 2014.

This is down to a mix of changes in regulation and an increase in fraudulent ‘back-door buy-to-let’ applications. This is because applications are based on rental income and not personal income, so buyers who were unable to afford a mortgage on their personal income would lie under the guise of renting the property out, but then moving into it themselves.

As such, lenders have clamped down on this, and customers who are considered a likely risk of committing fraud in this way are required to prove income as if the mortgage were a residential deal.

That said, there are lenders who can offer unique buy-to-let deals.

As such, it may be possible to obtain a buy-to-let mortgage with the following criteria:

  • No personal income at all (experienced landlords only)
  • No minimum income limit (new and existing landlords only need an income, regardless of size)
  • First-time buyer buy to let (never owned a property but buying a rental)
  • Bad credit BTL (wide range of adverse credit accepted)
  • Self-employed BTL (BTL mortgage with as per self-employed circumstances explained above)

Mortgage refused after gambling

The fact that you like to gamble may not necessarily be the sole reason why a lender rejects your application – that will depend on the type of gambling you indulge in, the severity of your habits, whether you’re a professional gambler or just gamble recreationally, and the mortgage lending criteria.

It can be difficult to get a mortgage as a gambler as lenders will likely consider you high-risk. Lenders will need to see that you have financial stability over a specific period – long-term gamblers with financial stability are likely to get accepted for a mortgage, so if you’ve been gambling for a shorter time, that could be one of the reasons why you were refused.

It’s worth noting that putting down a larger deposit from your own funds and not a gifted deposit will also benefit you, as underwriters will see this as the borrower being more invested in the property. So, if you have been refused a mortgage, you may want to consider putting down a larger deposit.

Mortgage refused during the coronavirus pandemic

It has still been possible to get a mortgage during the coronavirus crisis, albeit more difficult. Some customers have had their application declined because lenders have hiked up their deposit requirements and tightened their general eligibility criteria. Many banks and building societies became very cautious about lending at all when interest rates tumbled towards the beginning of the pandemic.

If you’ve had a mortgage application declined due to the COVID-19 situation, don’t give up hope. We work with a network of specialist mortgage brokers who have been helping out customers throughout the pandemic. They have access to every lender on the market and know exactly which ones are best positioned to help a prospective borrower with your exact needs and circumstances.

As was the case before the virus, some mortgage lenders have a higher appetite for risk than others. A select few still offer products with higher loan-to-value ratios, and the advisors we work with know who they are. Even if you’ve been furloughed or your income has been impacted, there is likely to be a lender out there who understands your situation and is flexible enough to offer you the mortgage you need.

So, if you’ve had a mortgage application declined during COVID-19, get in touch. Speaking to a broker before you re-apply could be the difference between mortgage approval and another rejection.

Mortgage lenders: understanding your denied application

If your mortgage application was denied by a lender such as NatwestSantanderNationwideHalifaxHSBCLeeds building society or other high street banks, you may be wondering what factors within your application they refused to lend to. This can vary from bank to bank, and so that is why we recommend speaking to a Mortgage Broker so that they can advise on what is the best way to still get a mortgage.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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