Mortgage Advisor & Director
Mortgage Advisor & Director
If you’ve had a mortgage application declined by Halifax, try not to panic. Even if they provided a mortgage in principle (MIP) only to reject you after, there can be various reasons, and a refusal at any stage isn’t uncommon.
Here we’ll cover why Halifax might have rejected your application, the steps to take next, and how to get your home-buying plans back on track.
Why would Halifax decline a mortgage application?
We often see mortgage refusals from Halifax, and here are some of the most common reasons they tend to decline applications:
Credit issues
Halifax has strict citeria with past and current credit. Sometimes the reason for rejection isn’t necessarily a low credit score, especially if you’ve been declined after the mortgage in principle (MIP)/agreement in principle (AIP) stage. It’s more likely because of specific types of bad credit present on your file.
For example, Halifax can be lenient with payment holidays, but if you’ve got adverse credit from something more severe within the last 6 years like mortgage arrears, County Court Judgements (CCJs), or bankruptcy - Halifax may decide to decline you (or at least investigate further).
Affordability and income source
Halifax generally caps how much you can borrow at 4.5 times your salary. And this income multiple limit is even more likely to apply if:
- Your income is under £40,000
- You’re applying for a high loan-to-value (LTV) ratio
- You have self-employed income and the total application income is under £75,000
Also, for those who are self-employed, typically you’ll need at least 2 years of account statements and SA302 forms or a tax-year overview for the past 3 years.
Age limits
Halifax has a minimum age of 18 for its mortgages and then a maximum age of 80 for all repayment mortgages (or 70 if any part of the mortgage is interest-only).
What’s also worth noting is that Halifax has specific rules for its age limits related to ‘maximum working age’, where it can use either a declared ‘anticipated retirement age’ or a hard limit of 75.
Halifax will also decline a mortgage application for anyone over 70 looking to remortgage with any additional borrowing or capital raising.
Property-specific problems
Halifax requires an experienced RICS (Royal Institution of Chartered Surveyors) qualified surveyor to check and evaluate a property, which is why they might decline a mortgage after the valuation. The surveyor will check the type of construction, the location, the intended use of the property, and even look for environmental issues.
For example, with leasehold properties, there must be at least 70 years of unexpired lease term at the time of your application. Halifax will also decline a mortgage if it’s a timber or metal-framed building where the cavity, between frame & cladding, has been retrospectively filled with insulation material.
Nationality and foreign income
Halifax requires all applicants to have permanent right to reside in the UK unless they can meet other specific criteria like:
- An LTV of less than 75%
- An income of over £75,000 for a sole applicant (or £100,000 for joint)
- Proof of living in the UK for more than 5 years
For any foreign income, Halifax will decline anything that’s not US Dollars, Euros, Australian Dollars, Indian Rupee, or Swiss Francs. However, they will still apply a 20% haircut (10% for bonus income) for currency fluctuations, which means Halifax could then decline your mortgage due to affordability concerns.
Common mistakes
We regularly see Halifax decline mortgage applications due to fairly straightforward mistakes. This might include forgetting to disclose all debts (perhaps a student loan from years ago), underestimating your monthly outgoings and spending, or even switching jobs or roles during the process (which sometimes can’t be avoided).
However, this is why it’s so helpful to have an experienced broker check over everything before you submit your application to a lender. Each lender tends to have their own preferences for borrowers, including Halifax, so it’s crucial to deal with the right lender for your situation.
What to do next if Halifax has declined your mortgage
Whether it was after an agreement in principle (AIP) or further along in the process, here are the steps to follow if Halifax has declined your mortgage:
1. Speak to an expert: If you take the time to speak with an experienced mortgage broker, they can take an in-depth look at your finances and property purchase plans. They’ll be able to evaluate where things broke down with your initial Halifax mortgage application.
2. Appeal or reapply: If your broker spots any mistakes, they might suggest appealing Halifax’s decision. If appropriate, they’ll guide you through the appeal process, including helping you contact Halifax’s underwriting team. If the issue can be rectified, your advisor will help you re-apply with Halifax once everything is in order.
3. Find a more suitable lender: If your adviser thinks you’d be better off applying with someone other than Halifax, they’ll explain exactly why, and ensure you get a great deal elsewhere. This is usually the best course of action to prevent another rejection as your broker can pair you with a more suitable lender for your situation.
If you want to have a free, no obligation chat with one of our expert brokers who’s helped plenty of people just like you secure a mortgage after being declined by Halifax, you can get started below:
Get your mortgage plans back on track today
Are Halifax a strict lender?
Halifax has stricter eligibility criteria in certain areas for some types of applicants. However, this is the case across most high street lenders and banks.
If your mortgage application with Halifax has been declined in between getting your agreement in principle (AIP) and making a full application, they say one or more of these reasons could be the cause:
- Significant changes to your monthly outgoings
- You’ve switched jobs
- The valuation doesn’t match the AIP offer
- You’ve applied for other forms of credit
- You’re looking for a high LTV ratio
- An unexpected piece of credit history has been discovered
How Teito can help get your mortgage application back on track
If you’ve had a mortgage declined by Halifax (or any lender), we know it can feel disheartening. No matter what stage of the application things broke down with Halifax - whether after an AIP, after valuation or on full application - our brokers can help you get it over the line.
They’ll advise you on improving your credit score, presenting your finances more attractively, dealing with any property-related obstacles, or finding a more suitable lender.
Here are some more of the reasons people choose our brokers if Halifax has declined their mortgage:
- Our brokers specialise in mortgage rejections at every stage
- Your first chat is free with no obligation to proceed
- We are 5-star rated on leading review sites
- It will prevent any further mortgage refusals
Ready to take advantage of a free, no-obligation chat with an expert broker who specialises in mortgages declined by Halifax? Get started here.
FAQs
Yes. Halifax is not one of the lenders who allows guarantor mortgage applications. See our complete guide to guarantor mortgages to find out which lenders do.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.