SAM Conveyancing explains that factors that are involved in what stops you getting a mortgage
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What stops you getting a mortgage?

(Last Updated: 26/02/2019)
8 min read
Key Takeaways
  • If the applicant has CCJs or Bankruptcy Orders then you'll struggle to get a mortgage offer.
  • Always provide factual information declaring any gifts or interest in the property. If your circumstances change, your mortgage offer can be rescinded, even if you've already exchanged contracts.
  • Factors like income, credit score and debt are carefully analysed by a lender when they decide if they're going to grant you a mortgage.
  • You can work on improving your credit score and you can also get a house survey for your own benefit.
  • Even if you pass your lender's checks, if the mortgage valuation reveals defects to the property, you might not be able to borrow as much as you need or your application can be declined.
  • Your best option is to request help from an independent mortgage broker, which has access to the whole market and find a suitable product for you.

It remains the case that most people buying properties in the UK make use of a mortgage in order to do so and of this group, first time buyers are the ones who virtually always require such a home loan to complete on their purchase. So what stops you getting a mortgage?

Essentially there are normally 2 broad factors, those related to your own mortgageability and those related to your house/flat itself: there are certain properties which lenders won't lend on and particularly under certain conditions.

This article gives a brief examination of this topic and suggests solutions to various problems as we go along.

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    What things will stop you getting a mortgage?

  • Credit Report

This is the first and most important area, which is likely to show up factors that are stopping you from getting a mortgage. It all starts with you getting your credit report - you can apply online to Equifax, TransCreditUK or Experian and you should get at least some version of it for free.

You'll get an overall score, which is a very broad and quick way for credit-giving firms to consider if you are a potential risk.

You might find this absurd, however if you haven't yet taken up any credit or very little of it, your credit score is likely to be low because there's little or nothing to rate you on. You can easily remedy this:

  • Check your report for any errors, such as old addresses which you're no longer attached to and old partners - either in love or life - that you've separated from. It is a sad fact that once you're tied to an address or a person, you're also connected with their credit history.
  • If there are old accounts that have been cleared and just need cancelling, you should get straight onto the companies involved to get them to clear things with the particular credit agency.

Get turned down for credit? Leave it for 6 months

Once one organisation turns you down for a credit application, it hurts your profile/score, so you'll find it more difficult to get a 'yes' from someone else. What's more, if you do so and get refused again, you're in an even worse position. Your best choice here is to leave matters to stand for at least 6 months, giving the 'knock' a chance to clear.

And it's always wise not to make too many applications at once - this can look to the agencies as though you are desperate for money, which is not a good look.

  • Debt

Unfortunately, 'sins' in credit terms are not all equal. Basically if you've been repossessed or made bankrupt, you won't be able to get credit for 7 years. Similarly, if you have County Court Judgements (CCJs) against you because you've defaulted on a court's order to pay a debt, you'll be shut out from getting credit for at least a few months or up to 6 years if you don't pay back the amount. You might have to pay more to use a specialist lender.

Regarding what turns up on your bank statement - bear in mind that yours will be heavily scrutinised by your lender and there are things you should avoid on bank statements if you're applying for a mortgage.


    Why would a house not be suitable for a mortgage?

Assuming you've managed to get a Mortgage In Principle (i.e. your lender has not only approved your basic application for a mortgage, but has given you a statement saying that they're prepared to lend you up to a certain figure to buy a home), the next step in your mortgage process is to pay for a mortgage valuation.

The trouble is, that's not the end of the process either. Mortgage lending companies are often either less willing or completely unwilling to lend on certain types of property, whether because of their seller valuations, their construction materials, their defects or even their specific locations.
  • If your lender undervalues your property - in essence, you have a sudden shortfall between what the lender is prepared to lend you and what the seller's asking for the property. Something has to give or it's back to the drawing board.
  • Your lender's valuation survey - this is different from the RICS survey and it uncovers a serious defect the property has. This might result in strict conditions being attached to your offer (i.e. you and/or the vendor committing to paying out money to repair a defect) or it might once again mean the end of the road for the property.

    This is one of the key reasons why we always recommend you get your own RICS home buyers defect survey. This survey is carried out purely for your benefit and is likely to uncover much more defects, if there are any, as your RICS surveyor is purely acting on your side and can help in any bargaining you have to do with the vendor.

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  • Certain lenders can be prejudiced against lending money for certain properties, particularly those of non-standard construction such as concrete built houses, steel frame houses and timber frame houses. Lenders may require more in-depth surveys to be carried out or they may refuse point black to lend.
  • Another factor in what stops you getting a mortgage is the unique aspect of your particular property. An example of a few of these might include:
    • flats above or near workshops
    • flats above or near restaurants/takeaways/pubs
    • flats above or near sex shops, massage parlours or premises that stock explosive or toxic materials such as fireworks and dangerous chemicals
    • flats in blocks of more than four storeys
    It's not that no lender will lend in these circumstances, it's just that your set-up fee and your repayment charges might be considerably more expensive and they might be more difficult to find as well, as they're unlikely to be found on the high street.

    How can you improve your chances?
Booking a consultation with an independent mortgage broker can make the difference in all these scenarios. At worst, they can advise you about the steps you must take to make yourself a better mortgage prospect but at best, they can sift through tens of 1,000s of lenders and their products to find one that best suits your needs.

You might be self-employed or a contractor or an overseas applicant. Regardless, your mortgage broker can help and their independence means that they can choose products from the whole of the market since they're not tied down to selling any particular lender's products.

Additionally, once you've received your lender's forms, they can best advise on how you should put your best foot forward for success.

Is the mortgage application process too stressful?
Get a free* consultation with one of our expert independent mortgage brokers. They'll work to find you your best choices from 10,000s of mortgage products and can best guide you towards success.

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Frequently Asked Questions
Andrew Boast of Sam Conveyancing
Written by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh Bailey, Digital Marketing Manager
Reviewed by:

Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.

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