Banks finding excuses to refuse mortgages
According to recent reports many banks are now using a range of excuses to turn down mortgage applications, as more and more banks shy away from lending money as a result of the ongoing financial crisis. Reports have claimed that lenders are using any excuse to turn down mortgage applications from consumers, adding that potential borrowers are being turned down for ‘the most spurious of reasons’.
The report showed that in one instance an applicant was turned down for a mortgage by a bank for going over their overdraft limit by just £30. Another applicant had a mortgage application turned down because of an outstanding parking ticket that had not been paid. This had left a black mark on his credit file because a County Court Judgement had been issued against him. Some people have outstanding mobile phone bills that were under dispute were also turned down.
Industry officials have said that many people are coming to the end of existing mortgage deals and are looking to remortgage to another suitable deal. However, many have been horrified to find that lenders are turning down their applications because of minor issues such as these. With banks finding more and more ridiculous ways to turn down customers whose business they do not want, many potential borrowers could be in for a shock in the coming months when the time comes to remortgage.
One industry expert stated: ‘Lenders are scrutinising credit files more closely than ever and rejecting applications for mortgages for what seem to be the most spurious of reasons. It is as if they don’t want to lend so are looking for any excuse to say No – however trivial it seems.’
Another added: ‘It seems banks are deliberately finding excuses not to lend. Every single lender is restricting its lending to those with a perfect credit score.’
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