Not getting something we want is never a nice feeling. This applies across our lives. Be it a table at a restaurant or a promotion at work, this kind of thing leaves a bad taste in the mouth.
Anybody looking to secure a mortgage will obviously want to be accepted as soon as possible. But the reality is that this is often not the case.
The truth is being accepted for a mortgage can be a challenge. This challenge can become even more difficult if you are self-employed as a contractor or freelancer, or if your credit score isn’t the best.
This means that being refused a mortgage is something many people have to deal with. Some new data on just how many have faced refusals has come to light this week. But there is also a distinct cause for optimism in the latest findings.
Reasons for refusals
People may be refused a mortgage for a host of reasons. Poor credit scores are a common example, with this being a problem for many lenders when it comes to committing to lending to such an applicant.
Means of income is another area that some lenders struggle with. This is where self-employed workers often come a cropper.
Naturally, each mortgage application will have its unique elements. If a broker is not used, it is the responsibility of the applicant to ensure the lender is seeing everything they need to see in order to proceed.
High refusal rates
If you have been refused a mortgage by a lender, you are very much not alone.
Recent research from Bluestone Mortgages has found that 23% of those applicants typically underserved by high street lenders, including the self-employed, have been refused a mortgage at some point.
Additionally, younger applicants are more likely to have been turned away when applying for a mortgage compared to older applicants. 77% of applicants typically underserved by high street lenders and between the ages of 18 and 34 have been refused a mortgage. This is compared to 55% for people aged 35-44, and 13% for those over 55.
Is this cause for concern?
It’s not ideal for those who are being refused, but there are definite reasons to not be too concerned.
The first reason is that additional findings from Bluestone Mortgages indicate that 98% of this type of applicant who is refused at some stage does go on to secure a mortgage. This alone should spur on anybody who has not secured the mortgage they would like as of yet.
The second is that the lenders who are doing the refusing are stepping up and not leaving applicants in the lurch completely. They are instead providing advice and guidance that is helping applicants to get the mortgage deal they crave.
This is being done in two main ways. One way of advising is to point applicants in the direction of other lenders who may be in a better position to meet their requirements and offer a mortgage.
The second is to recommend specialist mortgage brokers who can support and aid their attempts to secure a mortgage.
Getting on the right path
It can be demoralising to be refused a mortgage. But if this has happened to you, there is no reason to lose all hope of securing one down the line.
Often it is simply a case of not being a good fit for the lender you have spoken with. That doesn’t mean that your specific circumstances will rule you out of the running for all lenders however.
Doing the legwork and finding lenders who are better placed is a great step to take. This can be difficult to do alone though, so having a mortgage broker in your corner is really advantageous.
Roots Mortgages knows the right lenders to approach and how to give yourself a better chance of success as a self-employed worker. Our position as a leading contractor mortgage broker and freelancer mortgage broker means we can offer the expert guidance you need to get your mortgage plans moving in the right direction.
