Why was my mortgage application referred?
Your mortgage application could be referred for a lot of reasons but what does it mean when a mortgage application is referred and should you be worried. Most lending decisions are made by computers these days and a mortgage application referral will simply mean that a mortgage underwriter will need to take a look at your mortgage application in more detail.
What does a mortgage application referral mean?
A mortgage application could be referred at two stages, when you apply for a mortgage application in principle and when you make a full mortgage application to get a mortgage offer.
A mortgage application will usually be referred when the mortgage underwriter who is looking at your application doesn’t know if to accept your application or decline your application.
The mortgage underwriter or advisor will usually refer your mortgage application to a more senior mortgage underwriter to analyse further.
A mortgage application could be referred if:
- It is unclear how much income you have and the mortgage lender cannot verify your income
- The mortgage underwriter cannot verify your documents (This could be your identity or financial documents)
- The mortgage underwriter cannot find a product within the mortgage lenders product range that fits your situation
- The mortgage underwriter needs some more time to assess your mortgage application
- The property valuation report is being disputed as it has returned various differing valuations for the property you want to get a mortgage on
- You may have a complex mortgage case
- You may have joint applicants which the mortgage underwriter needs to assess in more detail
- The mortgage underwriter is unclear as to if you meet all the mortgage lenders eligibility criteria
- You could have something in your credit file which the mortgage underwriter is unsure about and therefore refers you for further checks.
As a guide, most high street mortgage lenders will not accept mortgage applications from borrowers with unique cases such as self-employed borrowers, borrowers with previous home repossessions, CCJs, IVAs or bankruptcies.
You should look to build credit by following credit building tips and then seek the help of a bad credit mortgage broker who will likely look to place your case with non-high street mortgage lenders.
The important thing to take away from this guide is that a mortgage referral could happen because of a lot of reasons and doesn’t automatically indicate a bad thing or that you are being rejected.
Most people who have a mortgage referred usually go on to get a mortgage offer and complete on their home purchase.
If your mortgage is referred and declined you should not be too worried, it may just be the case that you don’t meet the lending requirements for that specific mortgage lender.
In that case, you should speak to a mortgage broker who may be able to assess your case and provide you mortgage advise on which mortgage lenders will likely accept you.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.