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40% of younger buyers have been rejected for a mortgage – here’s how to avoid rejection

  1. 28 January 2019
  2. By Andi Forsythe

With news from Which? that 16% of current mortgage holders have been rejected in the past, with 29% rejected in London, we came up with our top tips for preparing for your mortgage application.

Which? today found that age played a factor in having mortgage applications rejected, with 40% of 18 - 24 year-olds being rejected before becoming home owners. This lowered to 15% for those in the 35-44 age bracket, and 8% for those aged between 45 and 50.

The Which? survey also found that after being rejected, over half took more than three months to be accepted for another mortgage.

On reallymoving last year, 54% of homebuyers were first time buyers. Regionally, 65% of those buyer homes in London were first time buyers, and 55% of those buying in the North West. 

If younger buyers are being rejected, it's more likely to be because it's their first time buying and they weren't aware of the possibility of a rejection and what it could mean. This could set them back in the buying process, and mean they lose out on their dream home.

We've compiled some advice to help first time buyers prepare for their mortgage application.

Our top tips for ensuring you get your mortgage are straightforward and simple:
  • Do the maths on your finances in advance – if after your deposit, the outstanding amount you need a mortgage for is more than 4.5 times your wage, you’re unlikely to be accepted. You may need to increase your deposit amount, look in a lower price bracket, or look for jobs that have a higher wage. Alternatively, looking at other types of mortgage that use family help, like a Springboard mortgage, might be a better option.
  • Apply for a mortgage in principle before you start viewing properties – this will tell you how likely you are to be approved for a mortgage. It will speed up the process when you do find your dream home.
  • Check your credit score well in advance of attempting to buy a home, and work on improving it if it’s not in your favour. There are simple ways to improve your rating, from correcting registered addresses and connected accounts to getting a credit-building credit card to repair any damage.
  • Sort your accounts – mortgage lenders may look back at 6 months of previous bank statements. Constantly being in your overdraft, having large loans or credit card debts to pay off, or having a number of items bought on finance could damage your chances. Paying off debts and ensuring you look financially viable on paper can make a big difference.
For more tips for first time buyers, have a look at our in depth Starting Saving guide, or our Property Viewing Checklist for all the questions to ask when looking at potential homes.

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