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What to do if You’ve Had A Mortgage Refused After the Contract Exchange

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: April 22, 2022

Having a mortgage application declined after the exchange of contracts has taken place is relatively rare, but it can happen from time to time, and when it does, people often feel like their homeownership dream is hanging by a thread.

We understand that hitting a snag so close to completion can be frustrating and upsetting, not to mention stressful, but don’t for a second think that you’re out of options. In this guide, we’ll tell you exactly what to do if you’ve had a mortgage offer withdrawn after the contract exchange and explain how to get your plans back on track as quickly as possible.

What to do if you’ve had a mortgage refused after contract exchange

First of all, banish any thoughts you have about this being the end of your mortgage plans. It’s only natural to feel stressed if you’ve had a mortgage declined just before completion, but it is possible to revive a mortgage application that has stalled after contract exchange.

Here are the steps to take to give yourself the best chance of reviving your application…

  1. Don’t rush into another application: First of all, take a quick breather and don’t rush out to another mortgage lender right away. Another rejection at this stage could impact your credit report and jeopardise your chances of getting a mortgage in the near future – the next steps are crucial, and you need to get them right.
  2. Get the right advice from an expert: You will need specialist advice from a mortgage broker if you made it as far as the exchange of contracts stage before being declined. The right broker will give you the best possible chance of either successfully appealing against your lender’s decision to withdraw your application or finding a better deal with another mortgage provider. We offer a free broker-matching service that can instantly pair you with a mortgage advisor who specialises in these things.
  3. Let us take things from here: Once we’ve matched you with your ideal mortgage advisor, they will take things from here, so you can take a pause to get your bearings. The mortgage advisor we pair you with will be an expert at overturning mortgage withdrawals. They will take the lead on the renegotiations with your current lender and also search the entire market in case there’s a better alternative out there.

Timing is of the essence when you’ve had a mortgage offer withdrawn after the exchange of contracts, so it’s a good idea to speak to an expert right away. Make an enquiry with us and we’ll quickly match you with a broker who can go through your options with you today.

Reasons why a mortgage might be declined after exchange

A bank or any other type of mortgage lender can refuse to offer a mortgage after the exchange of contracts has taken place. In fact, they have the right to withdraw a mortgage application at any point before completion, should they have a good reason to do so.

The most common reasons a mortgage might be withdrawn after exchange are as follows…

Bad credit has come to light late on

Bad credit would usually be discovered long before this point, but some mortgage lenders carry out a final credit check before completion. They might do this if they have any reason to suspect your credit report has changed since the beginning of the process, or if your application is complex and needs additional scrutiny from the lender’s underwriting team.

If the bad credit found after the contract exchange is deemed to be too severe, there’s a good chance the lender will withdraw your mortgage application before completion.

Your affordability has changed

If your mortgage lender has any reason to believe that your financial situation might change, they have the right to reassess it after exchange. If your income has dropped or your outgoings have significantly risen since you applied for your mortgage, they could pull the plug on your application or rethink the amount they’d be willing to let you borrow.

The lender suspects foul play

When evidence of possible fraud, money laundering or any other type of financial foul play comes to light, mortgage lenders can legally withdraw a mortgage application at any time.

An error on the application

A simple error on your mortgage paperwork can derail your application at any point, even after the exchange of contracts. This could be something as minor as a misspelt address or outdated proof of income – needless to say, you should double-check everything!

How we can help you overcome these problems

The mortgage broker we match you with will start out with a quick fact-find to establish why you were rejected after exchange and what can be done about it.

To get your plans back on track as soon as possible, they will explore whether there are grounds to appeal against the lender’s decision to turn you down for a mortgage. They will take the lead on the renegotiations, but will also search the entire market to check whether switching to a different mortgage lender is the best and quickest way to revive your plans.

The brokers in our network have deep working relationships with lenders who…

  • Offer second chances to borrowers who were declined after exchange
  • Can be flexible with all forms of bad credit
  • Can offer higher income multiples
  • Is willing to approve customers with high debt-to-income ratios

Since the brokers we work with know these lenders inside out, they can negotiate the best rates and deals with them on your behalf. They will also guide you through the re-application process so you can be confident your paperwork will be free of errors.

We're so proud of our customers

We hate seeing mortgage applications get denied, so we're extra proud when our customers find a mortgage through one of the brokers we work with.

Manchester, UK
I thought my mortgage was all sorted. Had the delivery van booked and everything, so I was distraught when my lender told me they had found an issue with my credit report during the final checks before completion. Not only did Online Mortgage Advisor stop my house move from falling through, they saved me money as the new lender my broker found was offering a lower rate.
Liverpool, UK
I was set to move into my new home and everything was going smoothly. But then I was furloughed during COVID and had to take a pay cut. The bank did final checks after I had exchanged contracts and decided I was too much of a risk on my current salary. Luckily Online Mortgage Advisor found me another lender straight away, one that was happy to lend the same amount on my furlough wage.

Can a Help to Buy mortgage be refused after exchange of contracts?

Yes, and this can happen for many of the same reasons we have discussed above. In addition to this, some Help to Buy mortgages hit a snag at the Authority to Exchange (ATE) stage. This is an extra step in the process where the Help to Buy agent contacts the conveyancing solicitor to grant them the right to exchange contracts with the developer.

ATE is valid for 28 days but it can be declined for the following reasons…

  • The agent suspects you’re planning to rent your property out
  • They find out you have a history of severe bad credit
  • They have reason to believe you’re not a first-time buyer
  • They suspect you’re using another government scheme as well as Help to Buy

If you’ve had a Help to Buy mortgage declined at the ATE stage, you should speak to a broker who specialises in Help to Buy mortgages. They can advise you on whether there is any room to salvage your application by renegotiating with the agent and/or lender.

Should this not be an option, they may be able to recommend another government scheme that might be a better fit for you, such as the mortgage guarantee scheme.

Where to get the right advice if a specific lender has declined you after exchange

The mortgage brokers we work with can help you regardless of which lender turned you down after exchange, whether that’s a high street bank or a specialist lender.

You might, however, want to take look through the guide pages we have dedicated to customers who have been declined by the specific mortgage lenders listed below…

Article key takeaways

  • 01

    Declined after the contract exchange doesn’t mean it’s over

    A mortgage broker with the right expertise could help you appeal against your lender’s decision or find you another mortgage provider who’s willing to approve you.
  • 02

    Expert advice is highly recommended:

    Going it alone without guidance from a mortgage expert means there’s a higher probability of another rejection, and this could be damaging to your credit report and set your plans back even further.
  • 03

    We can help you get it done right:

    Using a mortgage broker you chose at random isn’t the answer here. You’ll need somebody who specialises in reviving mortgage applications that broke down before completion, and our free broker-matching service will handpick a fully-vetted advisor with this expertise for you.
  • 04

    We can help you get it done quickly:

    Time is usually of the essence if your mortgage made it beyond the exchange stage. Everything else you need to complete your home purchase is probably in motion, so you’ll no doubt want to get your plans back on track as quickly as possible. Our broker-matching service can help you do exactly that, by handpicking the right advisor and connecting you with them today.

Call 0808 189 2301 or make an enquiry and we’ll arrange a free, no-obligation chat between you and a mortgage broker who specialises in reviving withdrawn applications today.


Is there a credit check between exchange and completion?

Not always, but if your mortgage lender has any reason to suspect your circumstances have changed since you originally applied, they might take a closer look at your credit report before completion. This can also happen if your application is complex and the lender thinks it calls for extra scrutiny from their underwriting team after exchange.

What should I do if my mortgage application was withdrawn after exchange during the coronavirus pandemic?

Seek professional advice from a mortgage broker and don’t assume that getting a mortgage is impossible because the COVID-19 crisis disrupted your plans. The brokers in our network worked business as usual throughout the pandemic and successfully arranged mortgages for customers who were on furlough, changed jobs and had their affordability impacted.

Will I lose money if my mortgage is withdrawn after exchange?

This is a possibility. The further along you get into the mortgage application process, the more likely it is that you will lose any upfront fees you paid if the agreement breaks down.

Seeking advice from a mortgage broker is the best way to safeguard yourself against this. Not only can they potentially negotiate a fee refund on your behalf, they might be able to find you an alternative lender who is offering a better deal than the one you had withdrawn.

Can a mortgage be declined on the day of completion?

Yes. Mortgage lenders have the right to withdraw a mortgage offer at any point before completion, even on the day it’s due to be finalised. It’s relatively uncommon for a lender to cancel an application this far into the process, though it has been known to happen.

If you’ve had a mortgage withdrawn on the day of completion, you should get in touch with us right away. Timing is everything in situations like this and we can make sure you get the right advice from a broker that same day, so you won’t necessarily have to delay your plans.

Ask Us A Question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

Ask us a question and we'll get the best expert to help.

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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

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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