Nando’s usually results in a bad taste in my experience, not home-buying problems (apologies to Nando’s lovers).
For me, it’s caused troubles in getting a mortgage. My home is in a large, newish block, with the chicken specialist close by and a small Tesco on the other side of the building.
When I bought the flat in 2013, my mortgage was declined because of the presence of commercial premises, though I eventually got it on appeal. It was hardly plain sailing when I remortgaged this month too – because of the Nando’s.
The upshot of my story is many lenders are picky even once you’ve passed ever-tougher credit or affordability checks, if your property or personal circumstances are not ‘standard’.
Proximity to shops, living in a high-rise, being too old or not having enough years’ accounts to prove your income could all put the kibosh on your application.
Lenders are picky – but there’s a sneaky way to check if you could be auto-declined
Each lender has its own lengthy list of criteria – of which some of the potential hazards are detailed below – that shape its lending decisions. And buried in them could be hidden nasties.
Yet lenders often don’t publish their criteria to the public.
So if you apply direct to a lender – as roughly a third of people do, even though a broker is the best route for many – there could be problems. See our Mortgage Brokers guide for help.
The risk is you go in blind and waste your time with a lender that will never accept you, and you risk a wasted hit on your credit file by applying to the wrong lender.
To lower the rejection risk you can access criteria available on the section of lenders’ websites intended for use by brokers or intermediaries. While often labelled as only for brokers’ eyes, anyone can view these sites.
It may be a slog to find what you’re looking for but it can be worth it for something as big as a mortgage. Even if you go via a broker, it’s worth a check for belt ‘n’ braces as they can make mistakes, and for your own peace of mind.
How exactly to check lenders’ hidden criteria
Just type the name of the lender and ‘intermediaries’ into a search engine to find the broker site, eg, ‘Santander intermediaries’.
When I did that, the first entry on Google was the Santander for Intermediaries website, and in the quick links on its homepage is its ‘residential criteria’.
To help speed it up for you I’ve listed links to the criteria page for a number of major lenders’ intermediary websites.
Of course, while these criteria are a good guide and will probably rule out rejections, there’s no guarantee you’ll be accepted if all looks good.
My story – when mortgages and Nando’s don’t mix
When I first bought my flat my lender declined the mortgage – partly because I didn’t know what I know now. From what it told me, its ‘computer says no’ attitude resulted in a rejection simply because there was a retail unit in my block, and it told me by phone it was more worried by the Nando’s than the Tesco.
Thanks to inside knowledge I’ve gained working at MSE Towers, I knew who to appeal to and the points to make, and I asked the lender to consider that the units may as well be in another building such was their distance to me, plus the modern nature of the construction means they are little harm anyway. It eventually agreed to lend me the cash but I doubt this appeal would have worked if I knew little about mortgages.
This spring, when I applied to remortgage, one of the two brokers I spoke to at L&C Mortgages told me there was a risk the new lender wouldn’t like the presence of the Nando’s.
My new lender’s published criteria said it doesn’t have a problem with commercial premises but it still sent a valuer round to check it. Fortunately it gave me the all clear but only after a few days of nerves awaiting the result.
Checking the criteria gave me the confidence to apply knowing the odds were in my favour, and meant I didn’t waste time going to another lender – though there was still a heart-in-mouth moment while I waited.
Properties that could get declined
Lenders prefer to lend on low-rise, exclusively residential homes in quiet streets. That’s because if the borrower misses payments and the lender repossesses the home to sell to claw back the money owed, they consider such properties easier to sell.
If there’s a fast food joint, pub or other outlet that could cause noise or smells nearby, they could deem a property less desirable.
Not all lenders will decline you in the scenarios below, which is why a good broker can direct you to the best options.
If your property or the one you hope to buy is in any of these categories, some lenders may say “no”, though this is far from a full list.
- It is above or near commercial premises.
- It is an ex-council home.
- It is in a high-rise.
- It is a new build with a high ground rent.
- It has a short lease.
- There is no working kitchen or bathroom – even if you’ve renovations planned.
Where your circumstances could lead to rejection
You may also be declined by some lenders if you fall into any of these categories (and many more):
- You’re in your 40s or 50s and a bank won’t lend into your retirement years – as many people want mortgage lengths of 20 years or more.
- Where you rely on bonus or commission income to prove you can afford a mortgage but a lender may not count all previous irregular income as evidence of future income.
- If you have less than two or three years of accounts to prove your income.
- If you’re still in your probationary period in your job.
So don’t just search out the best rate – do your checks and if in any doubt seek advice from a good broker. See our First-Time Buyers and Remortgage guides for full help when you apply. Good luck.