What To Do If You’ve Had a Mortgage Declined After an AIP
Getting clarity on why an application was declined after an agreement in principle can be difficult. We’ve helped thousands of borrowers understand the reasons and secure a successful application, with 15 experts dedicated to this scenario. We guarantee to get your mortgage approved and find you the best deal. If we can’t and someone else does, we’ll give you £100!*
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Author: Pete Mugleston
CeMAP Mortgage Advisor, MD
Quick Summary
About 30% of the customers we help have been declined or let down before coming to us – it’s more common than you might think.
There are several reasons for it, typically:
- Advisor Error – We see this a lot. Your advisor may have forgotten to include something, misskeyed something, or maybe didn’t disclose an issue the lender found on their credit search. Often these can be corrected, or had they been disclosed accurately, would have been approved (very frustrating).
- Additional info discovered on full application – the AIP doesn’t ask for everything. It’s an initial check to see if a lender would approve you based on your credit and the high-level numbers for deposit and affordability. On full application, they ask for more information and documents to evidence your income, as well as bank statements (in many, but not all cases) – sometimes these bring up info your advisor didn’t check before making the initial AIP, and are subsequently not acceptable.
- Property declines – issues with the property valuation, where there might be structural concerns or perhaps the construction material isn’t acceptable, and the lender would have never approved it anyway (your advisor should have checked this too).
- Something changes after AIP – an AIP is not a guarantee. It’s a live snapshot based on the information available at the time. If anything changes or more details come to light, the lender can still say no at any point (even after the formal mortgage offer!).
In many cases, the decline was the right decision – the initial AIP was a false yes (because you never fit the lender’s policy and the wrong lender was approached to begin with) – which is why getting the right advisor makes all the difference!
That said, there are also circumstances where lenders get it wrong. We often see declined applications and investigate further to see that, actually, in the right light, the case was strong – in these instances, we get a lot of appeals through and declined applications are overturned.
Going further, we can sometimes also get policy exceptions, where we are able to get the underwriter to agree to do something they would usually decline.
If you’ve been declined – reach out and see how we can help!
In this article:
Declined at AIP
What to do if you’ve been declined by a specific lender
An Agreement, in Principle, is not a final decision. Being declined at this stage indicates potential issues with your credit history, property valuation, or affordability concerns. To address this, understand the specific reason, review your finances, seek advice, and consider exploring options with other lenders.
Below are some of the key criteria lenders will look at when they assess your application:
- AIP is not a guarantee, is not binding, and is live
- Ensure accurate info on AIP application
- Ensure the borrower and the property fit all aspects of the lender’s policy
These are some of the questions you need to consider before you reapply:
- Who declined you? How many times (are there others)?
- Did the lender tell you why? If yes, what (income, credit, property, etc)? If not, has anything changed since AIP? Can they ask?
- Did you use an advisor or go direct?
- Get full info on all aspects to isolate the reason, including a copy of your credit file
To navigate through this hurdle and realign your mortgage application process, consider the following steps:
Rushing into another application so soon can have dire consequences for your mortgage aspirations. There are many reasons why your lender might have changed their mind after the AIP stage, and there’s no guarantee the issue won’t resurface next time.
Pause to get your bearings and see if you can determine why your lender declined your application after offering you an agreement in principle. If you can’t get your hands on this information, don’t worry; simply move on to step two below.
Not all mortgage brokers are the same. Some have very specific areas of expertise, and among our advisors, some specialise in reviving mortgage applications that have stalled after or during the agreement in principle stage.
They have the knowledge, expertise, and lender contacts you need to help you reclaim your plans, whether with your current lender or a new one offering a better deal.
You’ll barely have to lift a finger while one of our advisors carries out a quick fact-find to understand why your mortgage lender changed their mind. Once they’ve established this, they will offer you bespoke advice and get to work on a solution.
They will explore whether there are grounds to appeal against your lender’s decision to decline you after the AIP stage and take the lead on the renegotiations. But they’ll also explore whether pursuing an alternative mortgage offer elsewhere is in your best interest. They will search the entire market to find the lender best positioned to offer you a top deal.
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Why a mortgage would be declined after an AIP
You can be declined a mortgage after an agreement in principle for the following reasons…
- Failing the final credit check: Some lenders have their underwriters carry out a more thorough credit check before making a full mortgage offer. During this check, bad credit that went undetected during the AIP can come to light and trigger a rejection.
- Your circumstances have changed: If your income has dropped, your outgoings significantly increased, or bad credit has appeared on your file since you were offered the AIP, your lender could notice this during their final checks and decline you.
- There’s an error on your application: A simple error on your mortgage application can derail the whole process at any point, even if you have an AIP in the bag.
- The lender suspects fraud: Mortgage lenders can pull the plug on an application at any time before completion if they suspect fraud might be going on. They might be concerned this is the case if any of the details you provided for the AIP are inconsistent with what the lender sees when they carry out their final checks.
- The lender has changed its criteria: Lending criteria change all the time, and if your mortgage provider decides to alter its requirements after offering you an AIP, it has the right to change your mortgage offer or decline you altogether.
Other reasons
These are merely a handful of reasons why a mortgage application might be rejected beyond the decision in principle stage. Our advisors can help you regardless of why your mortgage application has stalled. If there is no room to renegotiate with your current mortgage provider, they could match you with another lender who…
- Specialises in bad credit mortgages and is known to overlook most credit issues.
- Could approve you even if your circumstances have changed
- Has a higher appetite for risk than lenders on the high street
- Won’t penalise you with high rates because you’ve been declined once
Moreover, your advisor will even give you a hand with your paperwork, so you can rest assured there won’t be any errors that could bite you later.
Make an enquiry, and one of our advisors who specialises in reviving mortgage applications that stalled at the agreement in principle stage, will get in touch today.
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What to do if you’ve had a decision in principle declined
The steps to take are much the same as the ones we outlined in the previous section, and keep in mind that this might not be the setback you think it is. Most mortgage lenders only carry out a soft credit check during the AIP, so your credit file is unlikely to be tarnished.
There are many reasons why a lender might turn you down for an AIP, including…
- Bad Credit
- Not enough deposit
- Your deposit source raises concerns
- Affordability issues
- The property is ‘unmortgageable’
- You’re considered too old
- Not enough proof of income
- Not enough address history
- And many other reasons
Whatever the reason you were knocked back for an AIP, the good news is that our advisors can significantly improve your chances of getting approved elsewhere.
They have deep working relationships with specialist lenders who have a flexible stance on all of the above, and they could negotiate an even better deal with one of them on your behalf.
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What to do if you’ve been declined after an AIP by a specific lender
Our advisors can help you regardless of which mortgage lender declined you either at the AIP phase or after. But we have standalone guides for people who have been declined by a specific lender that you might want to read before making an enquiry…
Specific lender guides
Declined By Halifax
A standalone guide for anyone who has been declined for a mortgage by Halifax, covering why this might happen and what to do next.
Declined by Skipton
A complete rundown of your options and possible fallback solutions if you’ve been declined for a mortgage after the AIP by Skipton.
Declined by Kensington
What to do and where to turn for the right advice if you have been turned down for a mortgage after the AIP by Kensington Mortgages.
Declined by Natwest
A standalone guide for anyone who has been declined after an AIP by Natwest, covering why this might happen and what to do next.
Declined by Nationwide
A complete rundown of your options and possible fallback solutions if you’ve been declined for a mortgage after an AIP by Nationwide.
Declined by Leeds Building Society
What to do and where to get the right advice if you have been declined for a mortgage after an AIP by Leeds Building Society.
Declined by HSBC
A dedicated guide for anyone who has been declined after the AIP by HSBC, covering why this might happen and what to do next.
Declined by Santander
A complete rundown of your options and possible fallback solutions if you’ve been declined for a mortgage after the AIP by Santander.
Declined by Precise Mortgages
What to do and where to get the right advice if you have been declined for a mortgage after the AIP by Precise Mortgages.
Article key takeaways
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01
You can still get approved for a mortgage:
Being declined before or after an agreement in principle isn’t the end of the road for you. There could be grounds to appeal against your lender’s decision or find a new deal elsewhere. -
02
Professional advice is a must from here:
A further rejection at this stage could be costly. If you’ve been declined once already, seeking professional advice from the right broker is the best way to avoid being turned away again. -
03
We can find the right broker for you:
Our broker-matching service can pair you with an advisor who specialises in turning mortgage rejections into approvals, even for customers who were declined after being offered an AIP. -
04
The right broker could save you time and money:
Using a handpicked broker who’s the perfect fit for your needs and circumstances is the best and quickest way to get approved for a mortgage after being declined after an AIP. Their expertise could help you save time, money and any further setbacks in the long run.
FAQs
If you’ve been offered an agreement in principle by a mortgage lender, your chances of getting a mortgage offer from them are good, but it’s not uncommon for deals to break down after this part of the process. Some lenders carry out extra checks before final approval, and issues that went undetected during the AIP can come to light.
If your application is complex or considered risky, the lender may request extra underwriter scrutiny and checks before final approval.
No. It won’t impact your credit report or jeopardise future finance applications. This is because most lenders don’t carry out a hard credit check while assessing applicants for an agreement in principle, so other lenders won’t see this on your file.
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Pete Mugleston
CeMAP Mortgage Advisor, MD
Pete, a CeMAP-qualified mortgage advisor and 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 successfully went the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained and 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 Online Mortgage Advisor of course!
I am a first time buyer with not very…
I am a first time buyer with not very good credit history . I understood it was going to be hard to get a mortgage I was refused else where but when I came to Dean he tried his very best reviewing all options for me and just recently I have managed to get a AIP which I am over the moon with.
Sophie Hughes
Buying our first home had been a…
Buying our first home had been a priority for us for a while, but my partners debt and history of bad credit prevented us from getting approved on the high street. We've now got our three-bed semi-detached house and couldn't of done it without the continued support of Online Mortgage Advisor
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