Homeowners between the ages of 18-24 are more likely to face mortgage rejection than older applicants, according to research from Which?
Four in ten (41%) of homeowners in that age bracket said they’d been rejected for a mortgage in the past, compared to just 4% of those aged 60 or above.Here are just a few reasons your application might be rejected and some steps you can take to improve your chances of getting the mortgage you need.
Improve your credit score
One of the most common reasons people have their mortgage applications rejected is that they have a poor credit score. Your credit score is mostly influenced by your borrowing history but other factors are also taken into account such as whether you’re registered on the electoral roll and how long you’ve lived at your current address.
The best way to build your credit score is by paying your debts on time each month. If you already have a bad history of debt, you’ve failed to meet minimum repayments, or you’ve used payday loans before, it may take some years before your application is approved. Seeking professional debt support and the help of a mortgage broker can improve your chances.
Boost your deposit
Another reason first time buyers sometimes face mortgage rejection is that they don’t have a big enough deposit. As a general rule, 10% is a good figure to work towards, though there are some schemes and circumstances in which you can buy a home with just a 5% deposit. However, there’s no guarantee that you’ll be able to buy a home with 10% of the property’s value. This can particularly be the case if you’re buying an expensive property that is worth more than four to five times your income. If you can save 20% or above, this can boost your chances of getting your application approved and sometimes decrease the amount of interest you owe in the process.
Increase your income
Each lender will assess your finances to determine how affordable the loan would be based on your current circumstances. If they look at your income and it seems as though you’ll struggle to make monthly mortgage repayments, your application may be rejected.
Increasing your income can drastically boost your chances of getting your mortgage approved, although this is of course much easier said than done and not always possible for everyone.
Use a mortgage broker
A mortgage broker can drastically increase your chances of getting a mortgage. They’ll take a close look at your finances, assessing everything from your credit score to your income before determining your likelihood of getting approved. By using a mortgage broker you can often protect yourself from rejection as your broker will have a thorough understanding of the mortgage market and will be able to use this to determine which lenders are most likely to approve your application and which are most likely to reject you.
If you’d like TaylorMade’s help getting a mortgage, please get in touch with our team today.
