Homeowners aged 18-24 are much more likely to have faced mortgage rejection than older applicants, according to research by Which?.
Four in 10 (41%) homeowners aged between 18 and 24 said they’d were built with a mortgage application rejected previously, compared with just 4% of those aged 60 or above.
Below, we explain the most common reasons for failed mortgage applications and explain things you can do to enhance your chances of a lender tallying.
Young people and Londoners at greatest risk of mortgage rejection
As a part of our 2022 mortgages survey, we asked over 3,500 people whether they’d ever endured a home loan application rejected.
One in six said yes, but because our survey only questioned those who currently have a home loan (and so were, ultimately, successful), the amount may actually be higher.
We also found stark differences between your youngest and oldest respondents, as the chart below demonstrates.
Money offers quite a bit to do with this difference. As younger buyers generally have smaller deposits and lower incomes, mortgage brokers tend to be more stringent when they assess whether to give loan to them. Younger applicants can also get had less time to spend accumulating a strong credit rating.
But it wasn’t just age that affected people’s mortgage chances; geography made a difference, too.
Our survey found that people living in London had the hardest time getting accepted, with 29% saying they’d had a credit card applicatoin rejected in contrast to just 11% of those within the The west.
Why do mortgage brokers reject applications?
A mortgage company will look at a number of things when it comes to the application, meaning there are a variety of possible reasons why you could get rejected:
Find out how to reduce the likelihood of getting rejected with our help guide to improving your mortgage chances.
Is a mortgage rejection really that bad?
Having a mortgage application rejected is really a pain, as you’ll have wasted time getting all of your paperwork together. But it may also have more serious consequences.
A mortgage rejection will leave an indication on your credit file, and will also be visible with other lenders who you affect in the future.
This won’t automatically mean another rejection, but the new lender will definitely need to know why your previous application was rejected which is going to influence its decision over whether to give loan to you.
If you’ve had a mortgage application refused, you may want to spend some time building your credit history support. Our research found that the most typical length of time people waited before being accepted by another lender was three to six months (33%).
