Over 400,000 refused a mortgage

Published on Friday 22 August 2008 23:11

FAILED mortgage applications are on the rise as lenders increasingly steer clear of borrowers they consider a credit risk, it has been claimed.

More than 480,000 mortgage and loan customers had to apply at least four times before securing credit in the past 18 months, according to research from GE Money Home Lending, while around 30,000 people made eight applications before succeeding.

Over 412,000 applicants were unable to get a mortgage or loan in the past 18 months despite repeated attempts, said GE Money, which suggested that previously credit-worthy applicants were now being classed by lenders as higher risk.

But repeated applications might be counter-productive, warned Gerry Bell, head of mortgage marketing at GE Money Home Lending, as they are logged on credit records and could count against borrowers in future attempts.

"The key to successfully navigating through the current storm is to do your homework, check your file looks as good as it can and potentially seek expert advice from a broker before making an application," advised Bell.

"Consumers should try as far as possible to only apply to lenders where there is a good chance their application will be accepted and reputable, professional advisers are well placed to help to achieve this."