Keep calm and talk to the lender.

Don’t worry and don’t give up on the whole process. Talk to the lender, ask to explain why your loan application was rejected. The solution may be easy – you might need to save up a little more cash for the down-payment or keep searching for a suitable property. Reasons can be very different, therefore don’t be afraid to ask the lender to provide a more detailed explanation and advice.

Go to a different lender.

Sometimes the reason for a declined application can be a non-standard structure of the transaction rather than insufficient income or poor credit history. There is a chance that the lender hasn’t fully understood the essence of the deal or isn’t able to correctly balance the risks. Most frequently this happens if the borrower receives income abroad, the transaction has several co-borrowers, or the borrower is self-employed. In such cases the solution can be very simple – choose a different lender.

The most common reasons for a declined mortgage loan application:
  • Insufficient down-payment. Keep saving up money and postpone buying a property. Here you can find a few tips for saving up faster.
  • Inappropriate property. Illegal reconstruction not completed building commissioning, old wooden houses, properties far from infrastructure, etc. Try to arrange legal aspects with the owner of the property, or try to find a different, more attractive property.
  • Insufficient income for the purchase of the specific property. Even if your income is high, it can still be insufficient for expensive property. If the credit payments exceed 40% of your income, the lender won’t issue a loan. However, this doesn’t mean that you don’t qualify for a mortgage – you just need to find a property in a lower price category.
  • Insufficient official income. Regular and official income is one of the most important aspects when evaluating the ability to pay. Regardless of how much you receive “in an envelope” or in other ways, the lender will only take into consideration your official income.
  • The lender doesn’t analyse the deal in depth or isn’t able to balance the loan risks. Go to a different lender.
A mortgage is a long-term commitment both for the borrower, as for the lender. That’s why the lender checks all the aspects of the deal, including the property itself. The answer “No” is given more often than “Yes”, but make sure that you understand the reasons for the rejection. It is possible that the specific deal is being declined, not your ability to take on commitments.