If you are looking to arrange a mortgage, you might think it is an impossible task. This is wrong. A huge number of people arrange a mortgage, even people who aren’t in great financial shape. You will also find many current homeowners have previously been denied a mortgage.
A recent study by a financial services company saw them speak to more than 1,200 property owners, and it turns out that at some point, 32% have been denied a mortgage.
If you are attempting to arrange a mortgage, it is helpful to know that being denied a mortgage once isn’t a permanent thing. Your circumstances change over time, and you can improve your appeal to mortgage lenders.
It might even be the case that while one lender will turn you down, other lenders will find you a better option. The task for applicants is to find the most suitable lenders for their needs, and to make the best possible application.
Gazumping is an issue in the property market
Another issue cited by owners is gazumping. A massive 45% of respondents say they have been gazumped when looking to buy a home.
Even once you have a mortgage in place and you make an offer which has been accepted, there are still problems which might stop you from owning a home. This sounds depressing, but it shows that there are many challenges to overcome when buying a home.
You need to prepare yourself for problems, and realise that setbacks are not a personal issue. A lot of people struggle to step on the property ladder, but with the right level of help and assistance, you can achieve your goals.
2020 has been a challenging year
The research also spoke to buyers regarding problems in 2020. 45% of respondents say they have experienced significant delays or complications in their attempt to secure a mortgage this year. We all know 2020 is a hugely challenging year, so it shouldn’t be a surprise that many people are struggling.
However, if 45% of respondents say they have experienced significant delays, it is not unreasonable to assume more than 50% haven’t experienced significant delays. This is a positive outcome, and it will hopefully help you apply in greater confidence.
The study also found 36% of respondents who say they are looking to purchase a property in the next 12 months will consider alternative finance, such as bridging loans, if required.
Paresh Raja is the Chief Executive of the MFS firm that commissioned the survey, who said; “The stamp duty holiday has already had a positive effect on the UK property market, sparking much more activity among buyers and sellers. However, today’s research shows that many prospective homebuyers are unable to take advantage of this initiative.”
Paresh also said; “Frustratingly, this is often due to the challenges of securing a mortgage, which are beyond buyers’ control. Many banks are treading carefully and, as a result, applications are taking longer to process and there is a higher chance of an application being rejected. This is putting property chains at risk of collapsing.”
Paresh concluded by saying; “At this point in time, it is important that lenders keep lending – they must ensure buyers have access to the finance needed to complete on a purchase. Failing this, the stamp duty holiday will only have a limited effect.”
Anyone looking to arrange informed and up to date guidance regarding a mortgage should speak with an experienced professional.