Mortgage Rejections Increases

Mortgage rejections increased fourfold in 2009: 9% of vetted mortgage application were rejected this year compared to just

2.3% in 2008.
According to estimates, all the applications qualified against the lenders’ criteria and seemed to fit. It is being said that lenders’ criteria have become too strict and even those applications that were expected to be accepted without a hitch got rejected.
Experts say that banks now pay special attention to credit histories, so any blemishes will complicate the process of getting a mortgage. All loan commitments, including credit card, loans, and store cards repayments must be made on time. A report on all missed payments is kept on borrower’s credit history for 6 years, which makes it easy for lenders to access the borrower’s credit score low and to reject his application.
Assessing affordability is a key factor for both, lenders and borrowers. As a rule, the most one can borrow is four times his salary, any application for a sum over this limit is very likely to be rejected as lenders generally base their judgments solely on the borrower’s salary.
Although at the moment many lenders actively advertised so-called 90% LTV deals, but mortgage brokers say that even borrowers with an extremely clean credit history get rejected. Actually, it is very difficult to get approved for any loan with more than 85% LTV as lenders turn applications down at a very minor of misdemeanors.