Two–thirds of first time buyers have had mortgage application rejected
Two–thirds of first time buyers have had mortgage application rejected
Successful loans for housing hopefuls have slumped since the pandemic began
First–time buyers are being warned to brace themselves for rejection following reports that 65 per cent of housing hopefuls have been unsuccessful in securing a mortgage.
Data seen exclusively by The Independent shows only a third of first–time buyers were able to get a mortgage on their first attempt, down significantly from almost half pre–Covid 19.
Almost half have been rejected for a mortgage once and a fifth say they have had multiple rejections, according to Aldermore bank’s First Time Buyer Index. The most common reason is poor credit history, but a fifth have been turned down due to an administrative error in the last year. Another 20 per cent didn’t have a big enough deposit.
Past financial decisions are also coming back to haunt applicants in other ways. Almost one in five were turned down because they had taken out a payday loan, with a similar number rejected because of large debts.
“It’s easy to see from the research why many first–time buyers can feel disheartened by the challenges when looking for their first home,” says Jon Cooper, head of mortgage distribution for Aldermore.
Over a quarter of prospective first–time buyers say their credit history is a particular concern, with the main barriers to a successful mortgage application including overdrafts, student loans and missing bill payments.
“I would also recommend getting help from a broker, which can be a great boost in navigating the many pitfalls and confusing processes. They provide a whole of market view and cut through the jargon to provide options specific to a new buyers’ individual circumstances.”
Contact us at Financial Foresight today on 028 9332 2822 to book a free, no–obligation consultation and let us help you secure your first mortgage.
Source: Kate Hughes, The Independent; https://www.independent.co.uk/money/first-time-buyer-rejected-mortgage-credit-score-history-debt-b1971213.html