7 Things That Can Stop You From Getting a Mortgage

Here, we examine some of the factors that most people assume will derail their mortgage plans—from severe bad credit to failing affordability checks—and explain how to overcome these hurdles. 

What can stop you from getting a mortgage?

Some mortgage lenders, especially high-street ones, can be picky about who they approve for finance. Even those with no history of bad credit can find the odds stacked against them if they attempt to go it alone and search for the right deal without prior knowledge of the market.

The market is vast, and every mortgage lender has different criteria you need to meet, so it pays to be aware of the obstacles you might need to overcome to get the finance you need.

Here are some of the most common issues that could stop you from getting a mortgage in the UK…

• Not enough deposit
• Failing the lender’s affordability checks
• Having bad credit
• Self-employed with no proof of income
• Issues with the property
• Age restrictions

Read on to learn more about how these factors could stop you from getting the mortgage you need. We’ll also explain how a whole-of-market mortgage broker could help you resolve these problems.

1. Not enough deposit

For many prospective home-buyers, saving up enough mortgage deposit is the biggest hurdle blocking their path to the property ladder. Most lenders will only approve an application if at least a 10% deposit backs it up, and if you want the best interest rate, you’ll likely need even more than that.

Suppose you have less than a 10% deposit towards your desired property. In that case, the important thing to remember is that some mortgage providers are willing to accept a 5% deposit under the right circumstances, and the advisors we work with know who they are.

There are also workaround solutions for borrowers with no deposit whatsoever. For example, if you have a family member willing to help you, speak to your broker about guarantor mortgages. Alternatively, you could consider a government-supported scheme, such as a shared ownership mortgage. 

2. Failing the affordability checks

The stringent affordability checks many mortgage lenders use in the current climate have been known to stop customers from getting the mortgage deal they want.

One of the main ways your prospective mortgage provider will assess this is by applying income multiples to your declarable earnings.

Some mortgage providers will cap their lending at 4.5 times your income, others will draw the line at 5 times, and a minority will stretch to 6 times, under the right circumstances. So, if you need to borrow £250,000 for the property you’re looking to buy, all of the mortgage applicants would need to have combined earnings of somewhere between £55,555 and £42,000, plus enough deposit, too. 

You can see how this could work out for you, based on your own earnings, by using our calculator here.

Debt-to-income ratios

Even if you’re earning enough to meet income requirements, your debt-to-income ratio could stop you from getting a mortgage if the lender feels you’ll struggle with a mortgage added to your other financial obligations. There’s no hard and fast rule on what percentage your debt-to-income ratio needs to be, but typically, anything below a 60/40 split (income/outgoings) is seen as low-risk, and anything higher may cause concern.

Approaching a mortgage lender with a lower income multiple or a relatively low appetite for risk where debt-to-income ratios are concerned could damage your prospects. It might mean you miss out on the finances you need or pay over the odds in interest.

But the good news is that the expert brokers we work with could potentially match you with a different mortgage provider offering high-income multiples and willing to take a bigger commercial risk.

3. Having a bad credit record

Bad credit can potentially prevent you from getting a mortgage. This is especially true if the credit issue is severe, like a repossession or bankruptcy, and the provider is a high-street lender.

Your chances of mortgage success largely depend on the nature of the credit problems against your name. When assessing a bad credit applicant, most mortgage providers base their lending decision on the age, severity and reason for your credit issues; some are more lenient than others.

Some mortgage lenders will turn you away outright if they think your credit issues make you too much of a risk. This can further tarnish your credit profile and make it even more difficult to secure finance in the future.

If you think you have bad credit, visit our dedicated credit reports page to learn how to check your credit reports for free.

There’s no reason to lose heart, even if you have severe bad credit. Not only can the brokers we work with match you with the right specialist bad credit mortgage lender, but they can also suggest ways to offset the risk posed by your credit problems, such as putting down a larger deposit and credit repair.

You can find out more in our article on bad credit mortgages.

4. Being self-employed without proof of income

One main issue that stops self-employed people from getting a mortgage is proof of income, namely, not having enough of it. If you trade this way, most mainstream mortgage lenders will likely ask you to submit two to three year’s worth of accounts to back up your application.

For this reason alone, many newly self-employed people struggle to find the finance they need, but if this applies to you, there may be fallback options.

The whole-of-market mortgage brokers we work with have deep relationships with lenders who specialise in self-employed customers and have a better understanding of their needs and circumstances. These lenders often consider self-employed mortgage applicants with accounts covering just 12 months or less, and they’re often better equipped to assess non-standard income.

5. Issues with the property

If you’re buying an unusual property or one with issues, there’s a good chance you’ll need specialist advice before proceeding. Issues that mortgage lenders are wary of include damp, Japanese Knotweed, and a high risk of flooding, while non-standard construction can be a deal-breaker for some mortgage providers.

In the UK, most properties that aren’t made from bricks and mortar fall into the ‘non-standard construction’ category, and to some lenders, this means they’re un-mortgageable, depending on the exact nature of the building materials, thus meaning it could stop you from getting a mortgage

Luckily, some mortgage providers specialise in properties that need work and non-standard construction, and they have a firmer understanding of the implications of unusual build types. In many cases, they’re more likely to rubber-stamp a non-standard construction mortgage or a deal involving a fixer-upper property than a high street bank.

See our article on property types to learn more about which property issues and building materials lenders are cautious of and how to boost your chances of securing finance under these circumstances.

6. Age restrictions

Old age often stops people from getting a mortgage post-retirement. If you’re a pensioner, you’ll likely find that your options are limited, and without specialist advice, finding the right lender can be tough.

But the good news is that there are mortgage providers who will lend to senior citizens of any age under the right circumstances. Sure, some lenders have age restrictions and won’t offer a mortgage to anyone over 75, but others stretch to 85, and a minority have no upper age limits.

If you’re concerned that your age might stop you from getting the mortgage you need, contact us, and we’ll match you with a broker specialising in later-life lending. They know which lenders are best positioned to offer you a favourable mortgage based on your age and circumstances.

7. Other factors that can stop you from getting a mortgage

In addition to the main issues that stop people from getting a mortgage, which we’ve covered above, here are some other, more general reasons why applications are unsuccessful.

• You’re not registered on the electoral roll: You must be registered to vote at your current address so lenders can confirm your details, but there’s an easy fix if you aren’t. Sign up online through the Electoral Commission’s website or via your local council.
• You made administrative errors on your application form: Take the time to fill out your mortgage application form carefully and don’t guess any of the answers (estimating how long you’ve been at your current address rather than giving an accurate answer could harm your application). If you’ve had difficulty with your mortgage application, get in touch. The brokers we work with can help you with all the paperwork as part of their service.
• You’ve taken payday loans: A history of payday loan usage can raise alarm bells with mortgage lenders, as many will see it as an indication of possible financial mismanagement. Seeking specialist advice is recommended if there’s any payday use on your credit report. See our article on payday loans and mortgages for further information.
• You’ve recently changed jobs or employment status: Changing jobs AND moving house is quite a lot to take on at the same time. Some lenders may be concerned about any chance you don’t pass the probationary period with your new employer or lack any trading record if you’re now self-employed. Again, speaking to a broker in this situation is smart – they can identify the mortgage lenders who, in such circumstances, will not put off.

Get matched with the right mortgage broker

If you’re concerned any of the issues we’ve discussed in this article might affect your chances of getting a mortgage, get in touch so we can match you with a mortgage broker for bespoke advice. Remember, failing to meet all of the items on the lender’s eligibility checklist could harm your chances of a successful outcome or result in an unfavourable interest rate.

The advisors we work with have in-depth knowledge of the entire market. With their help, you can rest assured that you’ll be paired with the right lender the first time, meaning the issues we’ve covered here are less likely to stand in your way. Call 0330 818 7026 or make an enquiry online, and we’ll match you with a broker for a free, no-obligation chat today.