What to Do If Your Nationwide Mortgage Application Gets Declined

Hearing that your mortgage application has been refused by Nationwide can come as quite the shock, and your instant response will most likely be to ask “Why would Nationwide decline my mortgage application?”

Well, being declined a mortgage does not mean that you will never get one, and it certainly doesn’t mean that you need to give up hope. In reality, leading lenders – like Nationwide – all follow a strict criteria that will ultimately decide on whether your financial standing and circumstances will ‘pass’ or not.

In this short article, we will guide you through all the possible reasons why your mortgage application was refused, exploring your options on how to move forward, and how to increase your chances of success for next time. Let’s jump in.

Is it Difficult to Get a Mortgage with Nationwide?

Nationwide is one of the UK’s largest and most respected leading mortgage lenders, and has become increasingly popular amongst first-time buyers. As a leading lender in the UK, Nationwide’s lending criteria – like many renowned high-street lenders – can be quite strict in comparison to other lenders.

In general, the Nationwide lending criteria will follow a similar structure to other lenders. In this process, the applicant/borrower’s applications will be assessed based on their credit history, employment stability, income, and overall affordability. However, as a competitive mortgage lender, Nationwide primarily caters to the majority. That is to say, the flexibility surrounding these formal assessments do not often leave a lot of allowance – or ‘wiggle room’ – for those who do not fit into the box of a traditional mortgage application.

For those who are self-employed, have fluctuating incomes, or even a less than perfect credit score, Nationwide may view your application as a high-risk case. In this event, it is likely that your mortgage application will be refused.

Fortunately, working with a trusted mortgage broker – like Boon Brokers – can help identify other specialist lenders that will allow for more flexibility – and a better alternative – that matches your financial circumstances.

What Are the Most Common Reasons Why Mortgage Applications Get Rejected?

Bad Credit History

A history of bad credit can play a massive role in having a mortgage application refused. During their assessment of your financial history, Nationwide will complete a credit check. Should your Nationwide credit score be too low, then this would be grounds enough for a mortgage application to be declined.

Common reasons for credit scores to be low would include:

• Missed loan payments from previous debts
• Defaults (closed accounts due to missing payments)
• Country Court Judgments (CCJs)
• Little or no credit history

In the scenario whereby you have had an Agreement in Principle with Nationwide, but were later declined, this is likely to be because of a revealed issue on your credit file.

Checking your credit report for errors and ensuring that all other outstanding debts have been paid or are well managed, can highly improve your chances. In addition, making consistent and timely payments for at least six months before reapplying can also help demonstrate a financial responsibility.

Affordability Issues

It is possible to have an excellent credit score and history, but still have a low income. Nationwide will assess your income and expenses using their own ‘Nationwide affordability mortgage calculator’ to determine whether or not your income is high enough to cover the monthly mortgage repayments alongside any other financial commitments you have. Should they deem your income too low for the borrowing amount you require, then it is likely that your mortgage application will be declined.

Making efforts to reduce existing debt and expenditure, or finding ways to increase your income, will help you become more attractive to lenders. In reality, however, increasing income is perhaps easier said than done. As such, waiting until a future promotion or increase to your overall income would be ideal, but applying for a smaller loan might be more pragmatic when it comes to reapplying for a mortgage.

Employment Stability

Employment is a main feature of your mortgage application, and is something that leading lenders like Nationwide will pay close attention to. Essentially, the lender will look at your income and potential income, and decide on your ‘risk factor’ – that is to say how sure they are that you will be able to complete all necessary repayments.

Because of this, lenders will generally prefer applicants that have a stable and long-term employment, with a steady monthly income. This allows for a clear insight into the applicants financial standing and future. In the case that you’re self-employed, on a fixed-term contract, or have irregular and fluctuating incomes, then your lender might consider your application to be too risky.

If you are self employed, making sure that you have at least two years of accounts can help demonstrate your financial stability. Similarly, if you’ve just started a new job, waiting until you have passed the probation period and have more of a grounding in your profession can also bolster your application by lowering your risk of any negative financial change. For more information on self-employed mortgages, check out our complete guide to self-employed mortgages.

In short: Lenders will always need to see that your income is reliable before they approve your mortgage application.

Age Restriction

Similar to other leading lenders, Nationwide mortgages have a maximum age threshold for taking out/or repaying a mortgage loan. This is to mitigate the risks associated with older borrowers.

Nationwide stipulates that the mortgage must be repaid in full before the applicant’s (or eldest applicant’s) 75th birthday. This is not uncommon amongst lenders, and so if you’re nearing retirement age and are looking for a mortgage – the Nationwide mortgages age limit might be the reason behind your mortgage application being denied.

It is important to note, that if you’re set to retire during the mortgage term length, it’s vital that you pass both your affordability assessment before and after your retirement age. Nationwide will use both income and anticipated retirement incomes in this assessment to decide your overall mortgage eligibility.

Finally, if you are older and in search of a mortgage, then applying for a shorter mortgage term could help improve your chances greatly. It is always best to talk with your trusted broker to see what is available and what specialist lenders can tailor to your specific circumstances.

Other Reasons?

In truth, when it comes to mortgage applications, there are a number of reasons why Nationwide may have rejected your mortgage application. Sometimes, rejections can occur because of technicalities rather than specific financial issues or history. While in other cases, a lack of necessary documentation, such as proof of income or identification,  can often lead to incorrect information that causes delays or straight refusals.

With an evolving property market, property valuations can also lead to a mortgage refusal. Either the initial valuation was incorrect, the lender’s personal evaluation is drastically different, or the evaluation does not correlate to the asked borrowing amount. Additionally, not having a sufficient deposit can be the reason behind a mortgage application to be refused.

Pinpointing the exact reason(s) can be challenging, however, there are measures that can be taken to improve your next mortgage application. Working with a trusted whole-of-market broker – like Boon Brokers – can help guide you through a great mortgage application and even find out exactly why your mortgage application was denied in the first place – completely fee-free.

Why Did Nationwide Decline My Mortgage After the Agreement in Principle?

It’s important to note that a Mortgage in Principle (MIP) – more commonly known as an Agreement in Principle (AIP) – is a preliminary assessment that can change, depending on a full application and financial assessment. In essence, an AIP is used as a rough estimation and guideline to allow borrowers (and applicants) with some insight into what they are likely to be able to borrow.

And so, understandably it can be very frustrating to have a mortgage in principle declined after thinking you were on track and in the clear for an approval. However, there are several reasons why Nationwide or a different lender may withdraw an AIP, including:

• Stricter Underwriting Checks: While an AIP will provide an initial assessment, the full application actually involves a stricter criteria. If any discrepancies appear between your initial details and the full review, for example an undisclosed credit commitment or inconsistent income figures, then this could lead to a rejection.
• Changes in Financial Circumstances: If due to unfortunate circumstances your income has decreased, you’ve taken on additional debt, or even your expenses have increased after the AIP was granted, then lenders may decide that you no longer can match their affordability requirements.
• Employment Changes: Any recent change in your employment will typically have a direct impact on your income. As such, if you have switched jobs, are on a probationary period, or have moved into a self-employed business model, then Nationwide may view this as an increased risk to your planned repayments.
• Property-Related Issues: In some cases, the property that you wish to purchase will be deemed unsuitable by the lender. As such, Nationwide can refuse a mortgage application if their survey of the property discovers any structural concerns, deem the building to be a non-standard construction, or even if its valuation is lower than expected.

In the case that your Nationwide AIP was withdrawn, Nationwide should provide details on the reasons behind your application refusal. Additionally, you can always request a review of your application summary.

Understanding the exact reasons behind your mortgage application being declined can highlight the areas that you need to improve or adjust before reapplying. If you are working with a mortgage broker, then they will also be able to request information on the application’s refusal, and work with you to create a better mortgage application before you reapply.

Can I Use a Different Lender After a Mortgage Application is Declined?

Absolutely! While you may feel uncertain about reapplying for a mortgage after an initial mortgage refusal, it may simply highlight that the lender’s criteria does not match your specific needs.

There are two very important things to keep in mind when asking “Can I apply for a mortgage with a different lender, after a mortgage application is declined?”:

• A leading lender, like Nationwide, is not your only option. There are a number of leading and specialist lenders who might be better suited for your mortgage needs.
• Consider the reasons for your initial application refusal, and the timeline in which you should reapply.

Just because Nationwide – or any other lender – may have declined your mortgage application, that doesn’t mean that all lenders will. From high-street leading lenders to specialist lenders, all mortgage providers will have varying criterias and it is very likely that you won’t be accepted by every mortgage provider that is out there. In reality, it is about matching your needs and financial circumstances to a mortgage lender that is best for you.

It is always best practice to revisit and understand the reasons behind your initial mortgage application refusal. This can provide you with a clear insight into what you will need to improve on, and the time-frame in which you should think about reapplying. If your refusal was credit based, or even related to a lack of savings/deposit, then waiting 6 months to save and clean up any financial debts could be the best way of ensuring you are approved next time around.

How Speaking to a Mortgage Broker Can Help After a Mortgage Rejection

Speaking with a trusted mortgage broker, who has whole-of-market access, has many benefits – especially if you have already received a mortgage rejection.

As a trusted whole-of-market broker, they will be able to conduct a wide-search for lenders that best match your specific circumstances. This can include searching for mortgages for applicants with bad credit, multiple income channels, or a low deposit.

The bottom line is that many of us do not fit into a one-fits all criteria. This can often be because of different lifestyles, employment types, or even past debts. In any regard, working with a trusted mortgage broker can help you search the mortgage market for the exact product that will match your needs.

At Boon Brokers, we can help you through the entire application process. Whether you decide on applying to a completely different lender, or have your heart set on a specific lender. We work with both indemand high-street lenders, like Nationwide, and specialist lenders alike.

Our aim is to match you with the mortgage that best accommodates your every need. Contact Boon Brokers today for expert mortgage advice and a helping hand in finding your next home – completely fee-free.