Most common reason for mortgage problems is multiple applications

August 13, 2016 by Brendan O'Neill

Lenders

According to a study conducted by Unusual Mortgages, an advisory company, the most common reason for problems with a mortgage application this year, was multiple applications.

Of 100 applicants who had experienced difficulty obtaining a mortgage directly from a high street lender, 20% had had multiple applications. The respondents had all had some difficulty when applying for a mortgage from a main stream lender, and had decided to contact an Independent Financial Adviser for advice.

Other reasons for application problems included debt consolidation problems, separation and divorce, employment status and not passing affordability checks. The lead adviser at Unusual Mortgages, Chris Morgan, stated that when an application is rejected from the first lender, it doesn’t always mean that successive lenders will turn down an application.

He added that when a person doesn’t fit the criteria of a tick box or a processing system, a mortgage adviser will use the knowledge gained from their CeMAP training course to conduct bespoke research to try and find a mortgage for the borrower.

In 2014, the Ipswich Building Society targeted a range of borrowers who didn’t fit the classic mortgage profile, like self-employed and small business owners. A number of other lenders have tried to provide loans to those who are ‘unusual’ and have been rejected by main stream lenders.

A number of providers have emerged this year, with the aim of providing mortgages to those who have adverse credit or are self-employed, using a flexible approach and looking at each individual case.