An associate dentist with income in excess of £60,000 was recently refused a mortgage of £180,000 because they fell four months short of one lender's policy, which requires two years of self-employed accounts. To add insult to injury, the lender initially provided the dentist with a Decision in Principal certificate and swiftly took payment of a £499 arrangement fee, which they later refused to refund.
Such errors can have serious implications for borrowers in the form of a ‘credit spiral’ because mortgage lenders rely heavily on credit checking when assessing an application. Declined applications will no doubt set alarm bells ringing for any mortgage underwriter. Get refused credit twice in quick succession and your chances diminish further.