Getting turned down for a mortgage can be disheartening, especially if you’ve found your dream home and need to secure financing quickly. However, being rejected by a lender doesn’t necessarily mean that your dream of owning a property is over. With the right approach, you can overcome this setback and still achieve your goal of homeownership. Read on to find out what to do if you’ve been turned down for a mortgage.

Understand the reasons for rejection

The first step to take when you’ve been turned down for a mortgage is to learn why your application was rejected. Lenders often give an explanation via email, letter or over the phone. However, some lenders won’t tell you why your application was refused. There are lots of reasons a mortgage might be rejected, ranging from a low credit rating to something as simple as a misspelling or incorrect personal information on the form. Finding out why you were turned down can allow you to fix those issues, boosting your chances of success in the future.

Check your credit report

Obtain a copy of your credit report from agencies like Experian and Equifax. Review it carefully to check for any errors that could be harming your credit score. There may be inaccuracies or outdated information on your credit report that you can correct, potentially improving your credit score and boosting your chances of getting a mortgage approved.

Improve your credit score

Since your credit score plays such a key part in determining your mortgage eligibility, it’s vital to take steps to improve it if it’s low. If you can, pay off any outstanding debts and make sure you’re making payments on time. Improving your credit score can take time and effort, but it’s worth it if you want to finally get the keys to your dream home. Keep in mind that taking out new credit accounts at this time can lower your score further, so it’s best to avoid this if possible.

Consider bad credit mortgages

If you’ve been turned down due to a low credit score or history of financial difficulties, you may want to consider mortgages for bad credit. These are offered by several specialist lenders who cater to individuals with less-than-perfect credit histories. Whilst bad credit mortgages tend to come with higher interest rates, they can provide a good solution for those who have been turned down by mainstream lenders. These mortgages take into account factors beyond just your credit score, such as your income and ability to make repayments.

Seek professional mortgage advice

Finding out you’ve been declined for a mortgage can be disappointing, but don’t lose hope. Seeking advice from a mortgage advisor or broker can allow you to explore your options and navigate your next steps. They may also have access to specialist lenders who can offer bad credit mortgages tailored to your situation.

Reach out to the team at A Little Mortgage Advice to discuss your situation and get personalised guidance on how to move forward after a mortgage rejection.

Clare Louise