Why Mortgages Can be Declined

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Why Mortgages can be declined

Being declined for a mortgage can seem like a major setback – but in fact you could still get a decent mortgage deal. Mortgage lenders can decline a mortgage for all kinds of reasons, even if they have already given you an Agreement in Principle.  

Most common reasons for a mortgage refusal

Lenders generally decline mortgages because you don’t fit their lending criteria, or something comes up in their checks that causes concern about offering you a loan. 

Here are some of the most common reasons for refusal:

  • You’re not on the electoral roll
  • Not meeting the lender’s criteria for the type of mortgage you’ve applied for
  • Missing or being late with payments on a loan, credit card or other finance
  • Mistakes on your application form. Incorrect addresses are common 
  • Defaulting on a loan or receiving a County Court Judgement (CCJ) in the past six years – meaning you have a poor credit history
  • Making too many credit applications in a short space of time – reducing your credit score 
  • Ever taking out a payday loan 
  • The lender feels that the mortgage repayments are unaffordable for you
  • You’re self-employed or a contractor and your income is too variable 
  • You’ve changed jobs recently 

Can a mortgage be declined after an Agreement in Principle?

Lenders can and do reject a mortgage application even after they have given you an Agreement in Principle (AIP) or Mortgage in Principle. 

An Agreement in Principle isn’t a guarantee that you will get a loan. Its purpose is to indicate how much the lender thinks they could offer you. The final mortgage offer only happens after the mortgage provider does various background checks and calculations after they receive your full mortgage application. 

Declined mortgages after an Agreement in Principle actually happen more often than you might think. 

What should I do if I am declined?

The first step is to find out why the lender rejected your application, by contacting them. It could be something simple that you can address immediately and reapply.

Next, research your credit score on one of the main credit agency websites. If anything listed about you and your finances is incorrect, you can contact the relevant financial brand and ask them to update their records.

If you discover that a bad credit score is the issue, you can still improve your chances of being accepted. The simplest – yet most challenging – solution is to put down a large deposit. You could also look at getting a joint mortgage with someone who has a good credit rating.  Alternatively, take some time out to improve your credit score before applying for a mortgage again.

Will a mortgage decline affect my credit score?

The good news is that a rejected mortgage application won’t harm your credit score. Your credit report will state that you applied for a mortgage, but it won’t detail the outcome of the application.

However, you can reduce your credit score if you make a lot of applications in a short time, so don’t rush into applying for another mortgage deal. Speak to a mortgage advisor to make sure that you meet the criteria before progressing with another lender.

How can a Mortgage Broker Help? 

Working with a broker means you will avoid a decline – as we will only put you forward for mortgages that will accept you. We have vast experience of all kinds of financial situations and can access hundreds of lenders, so we can find you a provider that will meet your specific needs. We’ll compare criteria, fees and interest rates to recommend the way forward.

We get to know you and your financial circumstances – and look out for hurdles that could make getting a mortgage more tricky. We support people in all sorts of situations, from First Time Buyers to people that need Self-Employed mortgages, bad credit mortgages or Buy to Let deals.

Get in touch and we will find a way to help you achieve your property goals. Contact our office today for an initial chat about how we can help you. 


Spot On Mortgages Ltd are an Appointed Representative of TenetLime Limited, which is registered in England and authorised and regulated by the Financial Conduct Authority.

A mortgage is a loan that is secured against your home. Think carefully before securing other debts againstor any other debt secured on it.

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