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Tips and Advice on Proceeding If You Get Declined for a Mortgage After Exchanging Contracts

Having a mortgage declined after exchange is unusual but not unheard of. If you get declined for a mortgage at this stage, it is important to move quickly to ensure the sale stays on track.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2023-05-09
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What To Do If You Get Declined For a Mortgage After Exchanging Contracts?

Having a mortgage declined after exchange is unusual but not unheard of. If you get declined for a mortgage at this stage, it is important to move quickly to ensure the sale stays on track.

Fortunately, there are several excellent lenders who can assist you if you've had a mortgage declined after offer. Still, we'd recommend contacting Revolution Finance Brokers as soon as you've found out that you've had a mortgage declined after exchange.

Can a mortgage be declined after offer for any reason? Not necessarily – it is rare for a lender to back out once they’ve made a formal proposal. However, there are scenarios where you could have a mortgage declined before completion, just as you thought the deal was finalised!

The first advice we’d give is not to panic; there are multiple options if you get declined for a mortgage at the last minute, and our experienced team can walk you through the options.

Why Can a Mortgage Be Declined After Exchange?

Lenders have the right to withdraw a mortgage at any point, so even though you’ve exchanged, it is possible for the provider to advise you’ve had a mortgage declined before completion – although there should be a clear justification.

How can a mortgage be declined after exchange? We’ve run through some of the potential reasons below.

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Mortgage Declined After Offer Due to Recent Credit Issues

Can a mortgage be declined after offer due to credit? By the time you have exchanged, your lender will already have run the necessary credit checks. However, if you get declined for a mortgage at this late stage, it could be because you’ve experienced credit checks just before completion.

If there is any reason to think your credit standing has changed lately, your lender can run a new assessment so you could have a mortgage declined before completion if you’ve just missed a payment.

Much depends on the lender and their policies around bad debt, but if you get declined for a mortgage due to credit, it may be because of a report that has just been filed and appeared since you exchanged.

Mortgage Declined Before Completion Due to Income Changes

Can a mortgage be declined after offer or completion? Changes to your affordability, such as a drop in income, an increase in debt, or a significant spike in outgoings, can mean you have a mortgage declined before completion. It is advisable to avoid any big life changes while waiting for a mortgage to complete.

Lenders that perceive you now wouldn’t pass the original affordability assessment can back out, meaning you get a mortgage declined after exchange.

Mortgage Declined After Exchange Due to Suspicious Activity

Can a mortgage be declined after offer due to a breach of lending policy? While very unusual, a lender may be obligated to withdraw an offer if there is a reason to suspect money laundering or any other illegal activity. An example might be where you get a mortgage declined gambling related due to large and unexpected income.

Mortgage Declined After Survey Due to Application Errors

Although by the time you exchange, any errors or mistakes should have come to light, there is nothing to stop a lender from withdrawing. You could have a mortgage declined after exchange, at any point, if there are inconsistencies related to your address history, income, or any other factor.

What to Do If You Get Declined for a Mortgage Before Completion

Having a mortgage declined after exchange can derail your plans, but with the help of a professional Revolution Finance Brokers consultant, there is no reason to think you can’t get things back on track.

When can a mortgage be declined after exchange? Literally, at any point before you sign on the dotted line!

If you get declined for a mortgage right before you are due to complete, please get in touch at your convenience. We'll do our best to recommend the fastest opportunities to correct the issue or identify a better-suited lender.

Reapplying After Having a Mortgage Declined After Exchange

A common knee-jerk reaction is to rush into a new application or desperately try and find any lender who will approve your application. This approach can be costly because you need to know why you have had a mortgage declined before completion.

If you get declined for a mortgage at this point, it is essential you understand the reasons to ensure you are equipped with the right knowledge to make informed decisions about what to do next.

Can a mortgage be declined after exchange and cause issues for further applications? Potentially, yes, if you rush to reapply to several lenders or build up numerous hard credit checks, it could damage your prospects of approval in the future.

Working With a Broker After Having a Mortgage Declined Before Completion

We strongly recommend getting in touch straight away to either work out the best way to appeal against the lender's decision. For example, if you've had a mortgage declined because of asbestos or another last-minute surveyor report, it is essential to verify whether this is accurate.

You could negotiate with the seller, explain you've had a mortgage declined after survey and why, and possibly account for this in the transaction value.

Picking the Right lender After Having a Mortgage Declined After Offer

Mistakes aren't an option when speed is of the essence, and you're worried about losing your dream home. Applying to a lender with similar policies could well mean you get a second mortgage declined after exchange, which could be disastrous.

Get in touch at any point, and we’ll discuss why you've had a residential or buy-to-let mortgage declined and put together an action plan to find the speediest possible solution.

How to Move Forward After Having a Mortgage Declined Before Completion

The first step is to examine why you've had a mortgage declined after offer, assess the possible actions, and potentially liaise with the lender to appeal or dispute their decision.

Can a mortgage be declined after offer and then be appealed? There may be grounds to appeal if you've had a mortgage declined gambling rated, for example, but the information presented to the lender is incorrect or simply requires some context (in fact, a lottery win might improve your affordability score!).

At the same time, if you get declined for a mortgage and need to move quickly, it is also important to review the market and assess whether another lender would be better suited and ensure you don’t end up with a further mortgage declined after exchange.

Much depends on the reason for the rejection. If you have a mortgage declined after survey reports, this could be something you can rectify with the seller, but if they aren't willing, you may require a lender who has a less strict maximum LTV borrowing policy.

Can I Have a Help to Buy or Buy to Let Mortgage Declined After Exchanging?

Lenders can withdraw their offer for any justifiable reason, whether you're purchasing a home, a buy- to let investment, or a first-time buyer using Help to Buy support. You can have a mortgage declined before completion, regardless of the property type.

In Help to Buy, it is perhaps more common to have a mortgage declined after exchange because lenders work through an additional step, where the Help to Buy agent liaises with the solicitor before they can exchange contracts.

Can a mortgage be declined after offer due to delays? The Authority to Exchange is given for 28 days. Still, if delayed, you could well have a mortgage declined after offer because the solicitor and agent haven’t completed the process fast enough.

Reasons you could have a mortgage declined after offer through Help to Buy include problems with your credit score, suspicions that you may intend to sublet the property, or any other circumstance that may make you ineligible.

If you get declined for a mortgage after exchanging but before completing in any scenario, the optimal way to either salvage the application or find a better-suited lender is to contact Revolution Finance Brokers for independent, whole-of-market advice.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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