Mortgage Declined by Nationwide

If you’ve applied and had a mortgage declined by Nationwide, don’t panic. There can be various reasons for a rejection from Nationwide, and a refusal at any stage isn’t uncommon. Here we’ll cover why they might have made this decision, the steps to take next, and how to get your home-buying plans back on track.

Why would Nationwide decline a mortgage application?

The exact motivation behind Nationwide’s decision to refuse your mortgage application will be specific to your circumstances and property purchase plans. However, the most common reasons are usually related to bad credit, affordability issues, and property-specific problems.

Most common reasons they reject applicants

We regularly see Nationwide decline mortgage applications and here are some of the most common reasons for rejections by Nationwide:

Credit issues

Underwriters at Nationwide could refuse your mortgage if you have bad credit or specific issues like recent late payments, county court judgements (CCJs), debt management plans (DMPs), past bankruptcy, or other adverse credit. For example, Nationwide will decline a mortgage if you have a CCJ and the value is too high or the date registered was too recent.

Type of property or construction

Nationwide may not be willing to offer a mortgage if part or all of the property is classed as a non-standard construction. Nationwide will also decline a mortgage application if it’s a non-new build leasehold property with less than 90 years remaining on the lease.

Past and present employment 

The underwriters at Nationwide might take issue if your job history is complex, you earn inconsistent income, or there are gaps in your employment. Nationwide also has stricter eligibility requirements if you’re self-employed (for example, needing at least 2 years’ accounts).  

Income and tax residency

Nationwide will decline a mortgage if you’re not a UK resident for tax purposes (except under specific circumstances). It will also reject mortgage applicants if: your self-employed income comes from outside the UK, your income is in a foreign currency, or the property is left unoccupied while you work abroad. 

Deposit source

Nationwide will decline an application if the deposit comes from crypto assets or if it’s funded from an unsecured loan like a credit card. It also has strict requirements around gifted deposits over £10,000. And if your deposit is from inheritance, you must provide Nationwide with a letter from the executor or solicitor for the estate.

Joint borrower sole proprietor (JBSP) applications

Nationwide doesn’t offer this product and will reject applicants looking for a JBSP mortgage. 

Each lender tends to have its own preferences regarding borrowers, including Nationwide, which is why it’s crucial to deal with the right lender for your situation.

What to do next if Nationwide 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 Nationwide 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 Nationwide application. 

2. Appeal or reapply: If your broker spots any mistakes, they might suggest you appeal Nationwide’s decision. If appropriate, they’ll guide you through the whole appeal process. Or if the reason for rejection can be rectified, your advisor will help you re-apply with Nationwide once everything is in order. 

3. Find a more suitable lender: If your advisor thinks you’d be better off applying with another lender, 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 an expert broker who’s helped plenty of people just like you secure a mortgage after being declined by Nationwide, you can get started here:

Get you mortgage plans back on track today

Speak To An Adviser

Are Nationwide a strict lender?

If Nationwide has declined your mortgage application after a mortgage in principle (MIP) or agreement in principle (AIP) - this is likely to do with affordability or your credit history. Nationwide often refers to this stage as a “decision in principle (DIP)”.

DIPs, MIPs and AIPs all refer to the same thing and are obtained relatively easily with a soft credit search. After your DIP, Nationwide will dig deeper into your finances and credit file. Nationwide might have uncovered something it’s uncomfortable with related to your income, outgoings, debt, or credit history.

Declined at the underwriting stage

Chances are, if your mortgage is declined by Nationwide’s underwriters, the problem is likely related to your: 

• Current finances and income: Nationwide might have affordability concerns, a problem with your source (or level) of deposit, or be unwilling to include all of your income (perhaps if you get bonuses, commission, or overtime). If it views your application as a higher risk due to your income structure, it might need to underwrite your case in more detail, which could lead to a rejection.  
• Credit history: It’s at the underwriting stage where Nationwide will carry out a hard search on your credit file. If it uncovers past or present adverse credit issues, it could lead to a mortgage rejection.
• Existing debt and debt-to-income (DTI) ratio: When looking at your finances, Nationwide’s underwriters might decline your application if you have too much debt in relation to your current income. 
• Spending habits: In some cases, Nationwide will decline a mortgage application if there’s excessive overdraft use or unusual spending. They are also strict around large transactions on bank statements that can’t be explained.

Declined after a property valuation 

If your mortgage application was declined after a property valuation from Nationwide’s surveyors, then the most likely reason is to do with the specific home you’re looking to buy. 

Here are the most common instances we see Nationwide reject applications after a valuation:

• Valuation estimates: If Nationwide values the property lower than your offer or requested borrowing amount (known as a down valuation), it might decline your mortgage because it increases Nationwide’s risk in case of default.
• Legal or title issues: Sometimes unresolved legal issues get uncovered relating to the property or the surrounding land, and any disputes or complications can lead to a rejection from a large lender like Nationwide.
• Property issues: If Nationwide discovers something like a Japanese Knotweed problem nearby that prevents use or access to an amenity space, it will decline your mortgage. It also won’t accept former local authority flats over 5 storeys (amongst other things). 
• Unexpired lease lengths: Nationwide has specific minimum unexpired lease requirements for different UK locations. For example, you need at least 30 years remaining at the end of the mortgage if you’re in England or Wales, but it’s 50 years in Northern Ireland and Scotland.

How Teito can help get your mortgage application back on track

If you’ve had a mortgage declined by Nationwide (or any lender), we know it can feel disheartening. No matter what stage of the application things broke down - whether after a DIP, a valuation or at the underwriting stage - our brokers can help you get it over the line. 

They’ll advise you on improving your credit, 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 us if Nationwide 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 Nationwide? Get started here.