Firstly, try not to worry. If your mortgage application is declined, you may be tempted to reapply right away. It’s best to wait and take stock of why your application was declined.
Here are some steps you can take if your application is declined:
Find out why your mortgage was declined
Ask why your mortgage application was declined. The mortgage provider may be able to explain why you were turned down.
If they didn’t tell you the reason, try asking which credit reference agency they used. You can check your credit report for any errors and fix them there.
Can a mortgage agreement in principle be declined?
If you don’t pass the lender’s own credit scoring system, they will not approve you for a mortgage agreement in principle(AIP). These scoring systems usually look at the same things as a regular mortgage application.
Even if you’re refused a mortgage agreement in principle, you may be able to apply and be accepted for another lender once you’ve solved the issue that caused you to be refused.
Even after a mortgage is agreed in principle, you can still have a mortgage declined. An AIP is not a guarantee of an offer and is reliant on a full mortgage application and credit check.
Seek and use financial advice
A qualified mortgage advisor can provide you with some insights as to why you had a mortgage declined.
Debt advice can help lower your credit usage too. This may improve your credit score for future applications.
