Halifax Mortgage Decline?
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Halifax Mortgage Decline? Here’s What To Do Next.
Has your latest mortgage application been declined by Halifax? We know it can be disappointing but it does not mean that you won’t get the mortgage. Halifax is a major bank on the high street that is part of the Lloyds banking group. Halifax does the most lending to mortgage borrowers hence they have stricter rules.
Due to the very high volume of mortgage applications Halifax receives, they have an automated application decision process. If the mortgage application does not fit in Halifax’s lending guidelines then the system will decline the mortgage application.
Many lenders use human underwriting who review each application. This allows them to check the whole case in detail increasing the acceptance of mortgage applications.
In this guide we will look at some of the main reasons why Halifax would decline your mortgage application and what steps you should be taking to increase approval chances with the help of MariannaFS.
Who Can Apply For a Mortgage with Halifax?
As one of the major lenders on the high street, Halifax accommodates a wide range of customers. However, Halifax focuses mainly on First time buyers by offering them better lending options than the competition.
Halifax’s lending proposition can be very generous for an applicant with the right income and deposit. Borrowers can borrow up to 5.5 times of their income. Halifax do offer mortgage for government schemes such as shared ownership, first home and many others.
Clients anywhere from employed to self-employed can apply for a mortgage with Halifax. But someone with bad credit or a newly self-employed client may not meet the lending requirements of Halifax.
Why Does Halifax Decline Mortgage Applications?
Having your mortgage application declined by Halifax can be very upsetting and worrying borrowers , but there will be a reason behind the Halifax mortgage decline.
This decision could be based on many reasons, some of the major ones we have listed below
Bad Credit History
Halving a bad credit history is one of the major reasons many home buyers struggle to secure a mortgage from high street banks. It is always advisable for those seeking to secure a mortgage from high street banks like Halifax to get their credit history checked to get their mortgage application approved in the first place.
Applicants can check their credit score from a credit reference agency like Experian, Equifax , Checkmyfile and Transunion.
Some common types of bad credit Halifax does not accept are county court judgements (CCJ), defaults, missed payments and individual voluntary agreements(IVA). That being said, other circumstances like the time of a default or the amount could affect the decision.
Halifax runs a soft credit search at the time of your decision in principal and a hard credit search at the time of your full application.
Too Much Debt
Halving too many outstanding credit cards or loans to pay can be a reason for Halifax to decline your mortgage. Lenders look at your income to debt ratio, so having more debt compared to your income is seen as risky from a lender’s point of view and it can result in your Halifax mortgage application being declined.
Small Deposit Amount
Halifax offers mortgages up to 90% loan to value. Which means having deposit of 10% can be sufficient but it is down to good credit history and your property type.
We have seen many first-time buyers can secure a mortgage with a 5% deposit with the help of government back scheme. But someone with poor credit history or buying a flat may need a higher deposit which can be reason for the decline of their Halifax mortgage application.
Affordability Check Failed
Like all lenders, Halifax’s lending is capped as set per the client’s income and deposit. In Most cases Halifax lending is seen as 4.75 times of their income which can be insufficient for the bigger mortgage application resulting in Halifax declining the application.
Halifax mortgage affordability will depend on the income and deposit amount. For example, someone with an income of £125,000 with a 15% deposit could borrow up to 5.5 times of their income. But the same applicant with a reduced deposit of 5% can borrow only 4.49 times of their income otherwise Halifax will decline the mortgage.
Employment Status
Halifax will look at your employment status and your history of employment as a key aspect while making a lending decision. Halifax will look at how the mortgage payments can remain affordable in the future.
Inconsistent income history or unstable employment can lead to a Halifax mortgage decline. For example someone with a zero hour contract started in the last 6 months or a self employed applicant without experience or trading history can be a reason for your declined mortgage.
Property Issue
Every mortgage lender will make sure the property is suitable for lending. The surveyor will carry out a valuation of the property, making sure it is fit for lending as per Halifax’s requirement.
Halifax does accept many types of nonstandard properties but every property is assessed on its own qualities. Properties with Japanese knotweed found in the garden may lead to a declined mortgage.
Incorrect or Insufficient Documentation
During the mortgage application process most of the assessment is done electronically but some times additional documents may be needed to support the information provided. Failure to provide the documents asked like ID related or income related may lead to the application being declined by Halifax.
What Is The Next Step If Your Mortgage Application Is Declined?
Do Not Reapply Immediately
After your Halifax mortgage gets declined do not make another application straight away. Even if it is tempting . Making many applications will affect your credit file. The right approach is to know the facts for why you were declined. Find a good mortgage broker and try to get more information to make sure you fit the lender’s requirement for a mortgage.
Find out the reason why your mortgage application is declined.
Knowing the exact reason for your Halifax mortgage application decline is very important for the success of your next application with another bank. Knowing what needs fixing such as more deposit, documentation or repairing credit history will help to secure the mortgage.
Work with Mortgage Brokers
Being declined by Halifax for a mortgage can be difficult but it is not the end , as many lenders may still consider your mortgage application. Working with an experienced mortgage broker like MariannaFS can benefit you from securing your mortgage.
Mortgage broker will find the cause of the decline and prepare the application for next lender to make sure the approval chances are increased than previous.
Some FAQS
Should I Go To A Different Lender Than Halifax?
Yes, if Halifax reject the mortgage application then you can approach another lender. Every lender will have different criteria for lending. Working with mortgage brokers like MariannaFS will help you as you will know if you fit with another lender’s requirements which helps to secure the mortgage from another lender.
How Long Does Halifax Take to Approve a Mortgage?
A Halifax mortgage application can take from 2- 4 weeks to be approved. But this time can depend on many factors and some times a mortgage application can take longer to be approved. However, working with a mortgage broker can reduce the mortgage approval time.
How Can a Mortgage Broker Help Me With My Halifax Mortgage Decline?
It can be very difficult to deal with a declined mortgage application from Halifax. But with the help of a free mortgage broker like MariannaFS it is possible to still secure the mortgage.
Our experience brokers will try and find the main reason of the decline starting from the beginning of the mortgage application to make sure the next application is going to be accepted.
We will guide your from start to finish of the mortgage application. With access to the whole market our brokers will find the best mortgage deal for your situation. Do not take our word for it. Read our hundreds of 5star revies from happy clients we helped secure mortgages to.
Why Did Halifax Decline My Mortgage Application After My Decision In Principal Was Approved?
Halifax runs a soft credit check at the time of decision in principal. But at the time of application the hard credit check may lead to fresh information which can cause the decline. Sometimes a change in personal circumstances after your decision in principal can lead to the decline of the application.
Whatever your mortgage needs are, working with MariannaFS can help you secure the mortgage in no time.
Contact us for more information with your Halifax Mortgage Application by calling 02080902043 or by email on info@mariannafs.co.uk.
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