Potential borrowers who have been declined for a mortgage are being urged to seek a loan elsewhere and not to let the rejection knock them back.
Bluestone Mortgages, a specialist lender, said 45% of consumers who have had their mortgage application turned down by a high street lender would be reluctant to apply again in the future.
And nearly 20% said they believed there were no alternative solutions. But while nearly half thought their best option, upon being rejected for a mortgage, was to seek help from an independent mortgage adviser, only one fifth actually went down this route.
Steve Seal, managing director of Bluestone Mortgages, wants people to realise that even if they have had their mortgage application declined by a high street lender, there may well be other options.
“These findings are concerning,” he said, “what’s most alarming is that some customers are unaware of the alternative options available to them if they have been rejected by a high street bank.
“The financial habits of consumers are changing and many perfectly eligible buyers could fall outside the ideal customer profiles of mainstream lenders, as they don’t fit into a ‘vanilla’ mould.”
Complex needs
The average debt held by UK households was at £15,400 last year, meaning mortgage lenders were more likely to be experience demand from potential borrowers with complex credit histories.
In light of this, Seal said it was important to reassure borrowers they still had a right to access lending – something which a mortgage adviser could help with.
Reasons for rejection
As part of the research carried out on mortgage rejection, Bluestone discovered more than two thirds thought they had been turned because they had a poor credit score.
Indeed, over a quarter cited adverse credit as a reason for a failed application, while 22% said they had been rejected because of an irregular income stream and 18% had a county court judgement (CCJ).
Being on the receiving end of a knock back, however, prompted a third of borrowers to change their spending habits and over a quarter said they had delayed their search for a lender.
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