How to avoid disappointment when applying for a mortgage

ONE in six (16%) mortgage holders were previously refused a home loan, research by Which? has found.

Younger people were most likely to have been rejected for a mortgage, with four in 10 (41%) of 18-24-year-old homeowners having experienced a mortgage rejection before buying their current home, compared with 15% for 35-44-year-olds and 8% for those aged 45-50.

So what does this mean? Which? Mortgage Advisers is warning that a mortgage rejection could lead to lengthy delays in the home buying process. The survey found that, of those rejected for a mortgage, over half (54%) took more than three months to be accepted for another mortgage.

Being rejected by one lender can also make it harder to get accepted by another so it’s important when applying to be fairly confident of being accepted. David Blake, principal mortgage adviser, Which? Mortgage Advisers, says: “While a mortgage rejection isn’t the end of the road it can clearly have a detrimental impact on the rest of your home-buying experience.”

Here are Which? Mortgage Advisers’ top tips:

■ Mortgage applications can be rejected for a host of reasons, like poor credit score, property valuation and not being able to provide suitable documents. Find out exactly what information the lender requires.

■ Don’t apply for a mortgage that you can’t afford. Generally speaking, someone with a good credit history may find they can borrow four to five times their annual salary, although this will depend on circumstances.

■ An independent mortgage adviser should be able to advise you on which lender you’d have the best chance of being approved with. The lender offering the cheapest rates won’t always be right for you.