Specialist mortgage articles to help you navigate the minefield of getting a mortgage to buy a home or to remortgage your existing home either a residential or a buy to let.

At SAM Conveyancing we give you all the information you need to know and write it in a way that makes it easy to understand. We also have a panel of mortgage brokers to help you find the best mortgage rate in the whole of the market and to complete the paperwork for your mortgage application.

Please click, read and enjoy. If you get stuck or need any help then call us and speak to a friendly member of the SAM Conveyancing team - 0333 344 3234 (local call charges).

What stops you getting a mortgage?

26/02/2019
What stops you getting a mortgage when you're looking to buy a home? 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 stands in the way of your being able to get 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.



Worried about getting a Mortgage?

Then have a free telephone 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.

*Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting with mortgage advisor - Terms Apply



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    1

    Are your personal factors stopping you from 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 - just 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 you as a risk, but the devil almost certainly will be in the detail.

No Credit History?

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 - see below.


You should particularly 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

Sadly 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, not a good look.

Big 'No-nos'

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, so your best bet here is to look to buy with someone else. This should be viewed as impossible, not least because you could contribute deposit funds and agree to pay a stake of the mortgage repayments. Visit Share A Mortgage, one successful company which matches up potential buyers where needs can match.

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 and up to 6 years if you don't pay back the amount. And you might have to pay more to use a specialist lender.

...Including the 3 worst 'devils'...
Regarding what turns up on your bank statement - bear in mind that yours will be heavily scrutinised by your lender - there are 3 things you really can't have on your bank statement when applying for a mortgage ; click to read our article entirely devoted to these three actions...!

Positive actions  

We've so far described the negative matters which can make your credit score and history unacceptable to a potential mortgage lender, however you can do much to help p yourself equally in a positive way.

Here are a few ideas:
  • Take on at least one bill in your own name and make sure you make timely payments towards it
  • Get a credit card - yes indeed - and either a) buy something small, ensuring you always make timely repayments or b) link it to a direct debit facility on your debit card such that at the same point each month, any outstanding balances on the credit card are paid off.

    People frequently come to grief through misuse of their credit cards, however you can equally well 'play the system' and watch your credit profile grow and grow.
  • Get on the Electoral Register (just click on the link and off you go!) Being on the roll increases your overall legitimacy and traceability.

    2

    Are there issues with the property you're looking to buy meaning your mortgage is being refused?

Here, we're going to assume that you've managed to get 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, in principle, subject to the result of a valuation you have to pay for. Click if you'd like to review the various parts of the Mortgage Process.

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.
  • Your lender undervalues your property: (click to find out more and what to do in this situation) - in essence you have a sudden shortfall between the mortgage 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 (NB not to be confused with your RICS survey - click to find out more and see below as well) uncovers a serious defect the property has. This might result in there being strict conditions being attached to your offer (such as 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 booking your own RICS home buyers defect survey (click to book). The latter survey is purely for your benefit and is likely to uncover much more defects if there are any (the site visit is normally far longer) and your RICS surveyor is purely acting on your side and can help in any bargaining you have to do with the vendor.
  • Certain lenders can be prejudiced against lending money to buy certain properties, particularly those of non-standard construction such as concrete built houses, steel frame houses and timber frame houses. They may require more in-depth surveys to be carried out or they may refuse point black to lend. (Click on any of the links in this section to find out more about these matters).
  • The property defects we've touched upon can also be uncovered by your own RICS surveyor, necessitating further negotiations with your lender.
  • Lenders can also refuse to lend because of some other 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
    NB 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 and you might find them harder to find as they're likely not to be found on the high street.

    3

    How can you give yourself the best chance of getting a mortgage and successfully completing on your purchase?

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 for example; regardless, your mortgage broker can help and their independence means that they can choose products from the whole of the market: 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.


Worried about getting a Mortgage?

Then have a free telephone 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.

*Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting with mortgage advisor - Terms Apply



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