Why Has My Halifax Mortgage Application Been Declined?
Every mortgage lender has a range of criteria and policies. In many cases, you can avoid a rejected application by working with an experienced broker who can identify which lenders have policies that will prohibit them from offering you the lending you need.
Here are some of the most common reasons for Halifax to reject an application:
- Your deposit needs to be higher.
Halifax offers a few first-time buyer mortgages with higher LTV caps. However, they will usually lend up to 85% of the property value for all other applications as an absolute maximum.
Therefore, you need a minimum 15% deposit to get past an initial assessment. First-time buyers will usually require at least a 10% deposit.
- There are adverse credit issues.
Most UK banks have strict policies about offering mortgages to people with even minor issues on their credit report.
Revolution often works with clients who have received an agreement in principle but have had their full mortgage application rejected. This situation is common since the more in-depth credit searches will throw up issues usually missed on an initial soft credit search.
- You are self-employed without sufficient trading history.
Another standard stumbling block is that high street banks need any self-employed mortgage applicants to have at least a year's worth of trading history and are more likely to lend if you have filed accounts for at least the last two years.
- The affordability assessment has failed.
Halifax will generally offer a ceiling of 4.75 times your annual income as the maximum mortgage value. If your application has been declined due to affordability, it usually means that you have applied for a higher value.
This process also accounts for outgoings and expenses.
- The property valuation wasn't high enough.
Halifax will rely on the valuation report according to the surveyor's opinion even if you feel your property purchase offers exceptional value for money. Many rejections are because the property is 'non-standard' - that might mean it has a timber frame, for example.
Other issues arise if the property has been built in a high-risk area or has been down valued at lower than the price you have agreed to pay for it.
The good news with any of these issues is that there is no reason you won't find competitive lending elsewhere. For example, many lenders offer up to five or even six times your income as a mortgage cap.
Niche lenders are comfortable lending against non-standard properties, and different mortgage providers use alternative calculations to work out affordability.
Suppose you have been turned down for a mortgage from Halifax. In that case, the crucial action is to consult Revolution Brokers as a whole-of-market broker to identify lenders whose criteria align with your borrowing needs.
What Can I Do If Halifax Has Rejected My Mortgage Application?
Being turned down for lending can be disheartening, but there are plenty of things you can do to move forward with confidence.
Here are our top tips to ensure your property purchase can proceed:
- Don't immediately reapply. It's tempting to find a replacement lender straight away, but making a wrong decision could mean racking up multiple credit searches on your file that will make the process harder.
- Ask for information explaining why your application has been rejected. This information can be vital in helping your broker recommend a more suitable lender.
- Contact the Revolution team.
Our independent mortgage experts will assess your circumstances and the rejected application to advise on the best steps forward and which lenders or mortgage products will most likely be approved.
