Bad Credit Discovered During Final Check
Some mortgage lenders may perform a final credit check between the exchange of contracts and your completion date. If your circumstances drastically change you are expected to inform your mortgage lender about it, and this may also prompt them to carry out some last-minute checks. A significant decrease in your credit score is likely to ring alarm bells for lenders, causing them to withdraw their offer even at this late stage.
Read more: Credit Score & Mortgages – What Credit Score Do You Need for a Mortgage?
Your Affordability Has Changed
Mortgage affordability is essentially a measurement used by lenders to assess your ability to repay your mortgage. As a general rule, to pass this check your ongoing property costs should not exceed one third of your gross income. Any changes in your financial situation can have a huge impact on whether or not you meet a lender’s affordability criteria. This is because job changes, new loans and increases in regular expenditure can all be significant tolls on your monthly expenses, and mean you can no longer manage the additional repayments.
Mortgage Declined on Affordability? Here’s What to Do >
The Lender Suspects Fraud
A mortgage offer might also be withdrawn at a late stage if your lender suspects fraud. There are many reasons why this unfortunate situation can come about, the main one being that you have made errors on your application. If this is the case, the issue can usually be quickly resolved by finding an expert mortgage broker to liaise with the lender.
The Offer Has Expired
Purchasing a property can be a complicated, lengthy process. With mortgage offers typically valid for around 3-6 months, it’s possible your agreement could lapse before you reach completion – particularly if surveys and other stages hold things up. However, in this scenario, you can absolutely reapply for the same mortgage, and have a good chance of success if none of your other circumstances have changed.
Read more: How to Get a Mortgage Fast
Lending Requirements Have Changed
A recent change in the Bank of England’s base interest rate can affect the interest rates on products offered by mortgage lenders. As a result, the lender may have changed their lending requirements to the point where you no longer fulfil them. If this happens, you will have to seek out a different lender who is a better fit for your circumstances.