Santander Mortgage Application Declined: What Should I Do Now?

If you have had a mortgage application rejected by Santander, there is no need to panic. Many leading lenders, like Santander, will have strict policies surrounding their lending criterias, and it might simply be the case that one part of your application did not tick a specific box.

The important part of receiving a mortgage rejection is understanding that there are still several options available to you. This can include contesting the mortgage refusal, selecting a new mortgage lender, or even reapplying at a later date.

In this article, we explore all the reasons why your Santander mortgage application declined, the best next steps you should take to secure the best mortgage offer for you. Let’s jump in.

Why Was My Santander Mortgage Application Declined?

Having a mortgage application rejected by Santander might come as quite a shock, and one of the first questions you might want answered is: “What was wrong with my Santander mortgage application?”

It’s important to know that, like other leading lenders, the Santander mortgage criteria is very specific in what they will allow. As such, if you don’t meet the criteria set out by Santander, your mortgage application will automatically be declined.

There are many factors that lenders will look at, and multiple reasons why an application may be refused. Understanding the Santander mortgage criteria is crucial in making sure your application is aligned with their specific requirements.

Asking a trusted broker – like Boon Brokers – for expert mortgage advice can help pave the way for a clear understanding of each lender’s criteria, and bolster your mortgage application.

What Santander Looks For in Mortgage Applications

A clear understanding of why Santander refused your application is crucial before taking your next steps. The two main questions Santander will ask when evaluating a mortgage application are:

• Does it make sense for you to take on the financial commitment and do we have any information that suggests you will be unable to do this?
• Is the risk acceptable?

Santander will look at all the information you have provided, including your age, occupation, income, details about your business or employment, and much more. And so with these questions in mind, let’s dive into some of the most common reasons Santander refused your mortgage application:

Bad Credit History

Having a history of bad credit can massively impact your mortgage application, no matter the lender. When you apply for a mortgage with Santander, they will conduct their own credit score with their preferred credit reference agency.

There are a few factors that can lead to credit scores being low, including:

• Bad credit history
• A history of missed payments
• A history of closed accounts due to defaults
• A County Court Judgment (CCJ)

As a leading high-street lender, Santander credit score criteria will be stricter than other specialist lenders. If your credit score is too low or shows a history of bad credit, then this could provide Santander with enough reason to refuse your mortgage application.

Improving your credit score can take time, but it can make all the difference to your mortgage application. This can be achieved by regularly making your payments on time, reducing existing debt, and checking your credit report for any errors.

Read our article on – Getting a Mortgage with Bad Credit – to learn all about securing a mortgage with bad credit.

Affordability Assessment

A fundamental part of your mortgage application will be your affordability assessment. In reality, Santander’s main concern will be the same as any other lender’s: can you afford this financial commitment?

Santander will have their own criteria when it comes to affordability, and will assess your income and expenses using their own ‘Santander affordability calculator’. If you’re struggling with debt and have high expenditures and monthly outgoings, this will reflect badly on your overall affordability.

In addition to this, your monthly income and employment stability will play a massive role in your affordability calculations. Should your income be seen as too low for the amount you’re requesting to borrow, then your mortgage application will likely be declined.

Increasing your monthly income will be challenging, however, making increased efforts to reduce existing debt and lowering your monthly outgoings can be a great step in the right direction.

Alternatively, applying for a smaller loan might help you appear more appealing and less of a risk to potential lenders.

Employed vs Self-Employed Issues

When looking at your employment history, it’s important to recall one of the questions listed by Santander: is the risk acceptable? This is the question lenders – and specifically Santander – will be asking during the evaluation of your application.

And so, it goes without saying that your employment status is a crucial part of your mortgage application and is the main factor from which lenders will calculate the borrowers (your) potential risk.

Employed borrowers with a history of long-term employment, are likely to always be more favourable to lenders than those who are self-employed or unemployed. This is simply because lenders can calculate with more accuracy the regular income against outgoings.

If you are self-employed, meeting the mortgage criteria can be more challenging. Applying for a self-employed mortgage with Santander, will require proof of earnings from the last two to three years.

Age Restriction

Specifically, the Santander age limit for mortgages is listed as 75 years old, meaning the mortgage term and all repayments must be completed before the oldest named applicant celebrates their 75th birthday.

It is common practice for most leading lenders to have a maximum age threshold for taking out and repaying a mortgage loan, and age can massively affect the interest and mortgage term length that you may be offered.

If you’re looking to retire during your proposed mortgage term length, it is vital that you provide clear affordability insights and evidence to the lender. This could include documentation of your income and anticipated retirement incomes.

Why Did Santander Reject My Mortgage After an Agreement in Principle?

Should your Agreement in Principle (AIP) be declined at the final stage of your application, then you’re probably wondering – “Why?”.

It is first important to note that an AIP is not a final agreement. Rather, it is a preliminary assessment of your financial profile, and is subject to change after a full financial assessment is completed by your lender.

If you have been refused a mortgage application by Santander, after an approved AIP, it is likely that their final assessment highlighted other factors about your financial standing that did not meet their criteria. For example, some of the most common reasons for a mortgage application to be refused after an agreed AIP include:

• Failed the final credit check: A full financial review may have revealed a financial history of missed payments, high levels of debt, or even just a credit score that falls below the Santander credit score requirements.
• A change in your circumstances: In the scenario that your income has dropped since the agreed AIP, or you have new debts or increased expenses, you might not fit the affordability criteria any longer.
• Incorrect information on your application: There might have been inconsistencies, like income details, that simply don’t match your official records.
• Lender’s criteria has changed: Lenders can frequently update their mortgage criteria, meaning you might not qualify for a mortgage under their new guidelines.
• Lender suspects fraud: If Santander detects any inconsistencies or unusual financial activity, they may reject your application as a precaution.

To help you secure an AIP, work with a trusted mortgage broker, like Boon Brokers. We can help find a lender that suits your financial circumstances and guide you through your mortgage application process from start to finish – completely free.

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

First and foremost, if your Santander mortgage application was declined, it is always best practice to understand why your application was rejected. Should your mortgage be refused based on the fact that you no longer fit the Santander criteria, you might start asking “Can I use a different lender instead?”.

The short answer is yes.

Leading lenders, like Santander, Barclays, Nationwide – to name a few –  will often have stricter lending criteria in comparison to other specialist mortgage lenders. This is simply because their mortgage products and criteria will generally be set to accommodate the majority. As a result, if you’re self-employed, have a less than perfect credit score, or even fluctuating incomes to account for, you may not be able to secure a mortgage with your preferred lender.

The good news – there are many mortgage lenders on the market today, including specialist lenders who may specialise and understand your financial situation. For example, there are mortgage products on the market today that can specifically help NHS workers, private dentists, investment bankers, self-employed, and many more!

Really, the end goal is to find a mortgage product that is tailored to you and your financial situation. Working with a trusted whole-of-market broker – like Boon Brokers – can help you access the full market of mortgages that are available to you. We can guide you through all the available lenders, including specialists lenders, to help find the mortgage match for you – completely free.

Can I Re-Apply for a Mortgage?

Yes, you can reapply for a mortgage. However, there are a few factors that you should consider before processing a mortgage reapplication.

It is vital that you understand why your initial mortgage application was rejected. This can provide you with insights into what part of your application you need to improve before reapplying.

If you apply for a mortgage online with bad credit, you might need to spend some time to improve your overall credit score. If affordability was the issue, saving for a bigger deposit, cutting expenditure costs, or paying back old debts could all help improve your application.

In any case, tending to the reason(s) why your initial mortgage application was rejected will undoubtedly enhance the chances of success with your next application. Before you reapply for your mortgage, we’ve created a quick 3 point plan that can help you consider your next move:

1)    Don’t rush into reapplying for another mortgage

Rushing into another application is perhaps one of the biggest mistakes that you could make. Without knowing the reasons behind your first application refusal, you will not be able to improve on whatever negatively affected your first application. Additionally, having a second mortgage application refused could damage your credit report, making securing a mortgage even harder the next time around.

2)   Understand why Santander refused your mortgage application

Understanding why Santander would not approve your application is the key to knowing how to improve your next mortgage application, be that with Santander or even another lender. Our advice is to always ask for any survey reports that were completed to ensure that there was not a problem with the property, and further request the grounds on which your mortgage application was declined.

3)   Work with a trusted whole-of-market broker

Working with a trusted whole-of-market broker can provide you with a host of benefits when it comes to securing your ideal mortgage. While Santander may offer the mortgage product you want, our whole-of-market access allows us to compare all mortgage products alongside other leading and specialist lenders. Helping you from start to finish, Boon Brokers will ensure that you find the mortgage deal that matches your requirements.

How Will Working With a Mortgage Broker After a Mortgage Rejection Help?

Working alongside a trusted mortgage broker, who has whole-of-market access, will provide you with a multitude of benefits, especially if you have already received a mortgage rejection.

At Boon Brokers, we can help you – from start to finish – secure the mortgage offer that best matches your needs. With whole-of-market access, we can compare the most up-to-date mortgage products that are on the market today, finding you the mortgage offer that matches your financial circumstances. The best part? We’re completely free.

Contact Boon Brokers today for free expert mortgage advice, and secure the perfect mortgage for your next home.