A self employed mortgage declined decision can be disappointing, especially if you were confident your application would be successful. The good news is that a rejection doesn’t always mean you won’t be able to get a mortgage. Every mortgage lender has its own lending criteria, so being turned down by one doesn’t mean you’ll receive the same outcome elsewhere.
At Jones & Young, we help self employed clients understand why a mortgage application has been declined and explore the options available. Whether you’re a sole trader, company director or run your own business, the right advice can make a real difference.
This guide explains the most common reasons an employed mortgage application is rejected, what you can do next and how to improve your chances when you’re ready to apply again. It also answers some of the most common questions self employed people have after being turned down.
Why Was Your Self Employed Mortgage Declined?
There isn’t always one reason why a self employed mortgage application is declined. Lenders look at several factors before deciding whether they’re happy to lend, and each one has its own approach to assessing self employed income. Understanding what may have affected your application is the first step towards improving your chances next time.
Some of the most common reasons include:
- Your income doesn’t meet the lender’s affordability requirements.
- Your credit file shows missed payments, defaults or other issues.
- You don’t have enough deposit for the type of property you want to buy.
- Your accounts, bank statements or other documents don’t provide the evidence the lender needs.
- Your business has only been trading for a short time or your income has varied significantly.
- Several recent credit search checks have taken place after applying with multiple lenders.
It’s also worth remembering that self employed applicants can present their income in different ways. The nature of your self employment can also influence how your application is assessed. For company directors, some lenders may assess salary and dividends, while others may also consider retained profits or other aspects of the company’s net profits, depending on their criteria.
Although a rejection can be frustrating, it doesn’t mean every mortgage lender will reach the same decision. Different lenders assess applications differently, so another provider may take a different view of your circumstances.
Can You Still Get a Self Employed Mortgage After Being Declined?
Yes. A declined application doesn’t necessarily mean you won’t be able to get a mortgage. Different lenders assess self employed applicants in different ways, so another lender may be a better fit for your circumstances.
For example, some lenders may place greater emphasis on your recent income, while others may look at a longer trading history or assess company directors differently. That’s why it’s important not to assume every lender will reach the same decision.
Before applying again, find out why your mortgage application was declined. Avoid making several applications in a short space of time, as multiple credit searches can affect your credit file. A mortgage broker can help you compare lenders and identify suitable options before you submit another application.
What Should You Do Next?
If your application has been declined, don’t panic. Taking a step back and understanding what happened can help you prepare a stronger application next time.
Find Out Why Your Application Was Declined
Ask your lender or mortgage broker why your application was unsuccessful. Understanding the reason can help you decide what to improve before applying again.
Check Your Credit File
Review your credit file for missed payments, errors or other issues that could affect future applications. If you spot any mistakes, have them corrected before you apply again.
Gather the Right Documents
Make sure you have the evidence a lender is likely to request, such as:
- Accounts
- SA302 tax calculations and Tax Year Overviews, often covering the last two years
- Bank statements
- Proof of salary and dividends, if applicable
Depending on the lender, you may also be asked to provide an accountant’s reference or other supporting documents.
Speak to a Mortgage Broker
A mortgage broker can explain your options, compare different lenders and help you find one whose lending criteria better suits your circumstances before you submit another application.
How to Improve Your Chances Next Time?
Although there’s no guaranteed way to get a mortgage approved, there are steps you can take to strengthen your next application.
- Save a larger deposit if possible, as this may give you access to more mortgage options.
- Keep your accounts and financial records organised so you can provide evidence quickly.
- Avoid making several credit applications over a short period.
- Demonstrate financial stability where possible, particularly if your earnings have recently changed, as lenders want to be confident you can keep up with your mortgage payments.
- Check your credit file regularly and address any issues before you apply.
- Make sure all information on your mortgage application is accurate and up to date.
- Consider speaking to a mortgage broker who can research lenders and recommend options that better match your circumstances.
Preparing in advance won’t guarantee success, but it can improve your chances of finding a lender that’s happy to consider your application.
Why Choose Jones & Young?
Being declined doesn’t mean you have to face the process alone. At Jones & Young, we work with self employed customers every day, helping them understand their options and find lenders that suit their circumstances.
Whether you’re a sole trader, company director or run your own business, we’ll take the time to explain your options, answer your questions and support you throughout the mortgage application process. If your previous application was declined, contact us today to discuss your options and take the next step with confidence.
Self Employed Mortgage Declined FAQs
If you’re still unsure what happens after a mortgage application is declined, these frequently asked questions cover some of the most common concerns from self employed borrowers.
Can I apply for a mortgage again after being declined?
Yes, but it’s best to understand why your application was declined before applying again. Addressing any issues first could improve your chances.
Does a declined mortgage affect my credit score?
A declined application itself doesn’t usually lower your credit score. However, multiple credit searches from several applications in a short period may affect your credit file.
Can I get a mortgage with one year of accounts?
Some lenders may consider applications with one year of accounts, although most lenders ask for a longer trading history. It depends on the lender and your individual circumstances.
Can a mortgage broker help if my application was declined?
Yes. A mortgage broker can explain why your application may have been rejected, compare different specialist lenders and help you find mortgage options that are better suited to your circumstances.
