Mortgage Declined By Halifax? Here’s What To Do Next.

As one of the most popular high-street mortgage lenders in the UK and part of the Lloyds Banking Group, Halifax tends to have stricter lending rules than most.  

Due to the sheer volume of mortgage enquiries Halifax receives, each application will be vetted using an automated decision-making process. If your application doesn’t fit within its lending guidelines, you’ll likely receive a frustrating ‘computer says no’ response, but that doesn’t mean all other mortgage lenders will reach the same conclusion. 

We work with lots of specialist mortgage lenders who assess each applicant on a case-by-case basis using human underwriters. This method allows far greater flexibility for accepting applications that might not seem ‘perfect’ when viewed by a computer. 

In this guide, we’ll outline some of the main reasons why Halifax would decline a mortgage application, what steps you can take to improve your chances when you re-apply and how Haysto can help make your mortgage possible when other brokers can’t. 

Why Halifax might decline your mortgage application

In general, there’s three overarching reasons why Halifax could decline your application: 

• You haven’t provided enough evidence to satisfy the affordability checks and prove your income can cover the monthly mortgage repayments for the amount you want to borrow (this can be a particular issue if you’ve recently become self-employed, for example).  

• Your credit score is too low, typically caused by one or more bad credit issues registered on your Credit Report and/or you’re not registered on the electoral roll at your current address. 

• The survey carried out on the property you’re looking to buy has returned a valuation below the purchase price, changing the overall loan-to-value outside Halifax’s lending criteria

More specifically, your mortgage application could be declined by Halifax for several reasons including the following: 

• You’ll be over 80 years old by the end of the proposed mortgage term

• The main source of your annual income comes from either a seasonal or temporary contract

• You’re currently paying into a debt management plan (DMP)

• You’ve been declared bankrupt within the last six years

• You’re currently residing outside the UK

• You want to apply using a guarantor

• You’re a professional gambler

• You’re a Company Director and want to use a combination of salary and net profits from your business as your main source of income

• The main source of your deposit is a loan from a member of your family or a gift from someone who is not a blood relative

• You want a self-build mortgage (to build your own property)

In addition to the above, Halifax will decline mortgage applications for particular property types, such as mobile homes, houseboats, or commercial B&Bs. 

(Source: Criteria Brain )

What steps you should take next

If Halifax has rejected you for your mortgage, the one thing you mustn't do is rush in and reapply straight away with other mortgage lenders, expecting a different outcome. 

Applying for a mortgage will show on your Credit Report but won’t show if you were accepted or declined. However, multiple hard search mortgage applications in a short period of time will indicate to a lender that you’ve been rejected and lower your credit score, making it harder to be approved. 

This is why it’s essential to take your time and follow these steps to give yourself a better chance of getting the mortgage you need: 

• Find out why Halifax declined your mortgage. Speak to Halifax and establish why your mortgage was declined and what the circumstances were that led to this decision. If the reason given is specific to Halifax’s lending criteria (an issue with the deposit source, for example), you can then search for lenders who will accept these requirements. If it’s a credit issue, take some time to repair your credit score before reapplying. 

• Speak to a mortgage broker. Once you know the issue that led to your application being rejected by Halifax, the smart next move is to seek the help of an experienced mortgage broker. Your broker will be able to help rebuild your application and identify lenders who will look more favourably on your case. 

• Apply with the right lender. Taking the time to fix whatever issue led to your application being rejected now puts you in a much stronger position to get the mortgage you need. With your broker’s assistance, you can now reapply with a lender whose criteria are better suited to considering your case. 

How Haysto can help make your mortgage possible

Haysto has a proven track record of securing mortgages for people rejected by mainstream lenders, such as Halifax. That’s because we know that automated decision-making simply doesn’t work for most complex issues, and everyone’s circumstances are different. 

A rejection from one lender doesn’t mean all others will do the same. In many cases, the difference between getting a mortgage or not can depend on choosing the right lender most suited to your specific requirements. 

We work closely with several specialist lenders who help people in similar situations every day. These lenders prefer a more human approach to assessing an application rather than a computer-based checklist, giving you a better chance of success. 

All you have to do is make an enquiry and a member of our mortgage team will be in touch to get started.