Understanding Why the Computer Says ‘No’

September 4, 2016 by Pinnacle Mortgage Centre

Nothing is more frustrating when you are looking to arrange finance but the response you receive is ‘we cannot help you Mr & Mrs Customer as the computer says no’. Whether it may be for a major transaction such as a mortgage or even for a smaller scale scenario such as increasing your overdraft by a nominal amount, the anger and disillusionment can be overbearing.

Unfortunately, in our own industry being the mortgage world, this is too often common place. This not only causes consumers to feel irritated and frustrated but also naturally leads to people feeling confused and rejected. Commonly this makes consumers feel like they’re at a dead end and have nowhere to turn, which in most instances isn’t actually the case.

We typically meet clients at this juncture, and you can only sympathise with their individual predicament. But in our inquisitive nature we always try to unravel what went wrong, establish if the client could have done anything differently, and ultimately find out why that nuisance of a computer said ‘No’.

Whilst the complex formula mortgage lenders apply can alter daily, usually the main reasons for this computer saying ‘No’ are due to failure to meet criteria regarding key areas such as affordability, credit score, age requirements and property specifics. Fortunately, when the computer is challenged and presented with a carefully packaged case, the chances of getting this machine to say ‘Yes’ are vastly increased.

In the scenario of a ‘No’ due to affordability, this is usually cut and dried, as you either can legitimately prove your income or you cannot. It’s not usually a shock when we see that one lender would offer 30% more than another lender, as this comes down to bespoke income calculations that are applied. Some lenders may require strict timescales of employment length, and will frown upon bonus payments, second jobs, less than 2 years’ accounts etc, where some other mainstream lenders are more accepting of such items. The simple tactic here though is to analyse the lenders income criteria, ensuring a lender is chosen who are happy with your own situation.

For a credit score ‘No’, this will be based upon the status of your credit situation. We would always suggest reviewing your credit report before looking to apply for a mortgage, as this will provide you with an indication of your overall credit positioning. A lower credit scoring doesn’t have to mean a ‘No’, it simply comes down to researching which lenders are accepting of lower credit scores, or scenarios where you’ve experienced credit issues in the past. It may be that you’re looking to remortgage to raise funds which will be going towards repaying debts to ease financial burden and improve your credit standing, so it would be unfair to penalise your intentions without proper consideration.

Lenders age requirements have for some time been a taboo subject, with a lot of clients believing that when they hit a certain age this means the end of any mortgage assistance. Right now though there are some mainstream lenders that have relaxed this approach, with mortgage terms now potentially stretching to 85th birthdays and beyond. There are some lenders that remain restrictive to clients over the age of 70, but again assessment of criteria before submission is essential here.

Lastly and usually most frustratingly, the computer saying ‘No’ due to property specifics. To give an example, a lender may choose to decline your application on the basis the property is within the vicinity of an ex-local authority property, is above a shop premises or if the lease is at a certain term such as 50 to 75 years remaining. They’ll be situations that arise more uncommon and unbeknown to you such as Japanese knotweed or property subsidence, but instances such as these will be in your benefit from the point of view of being made aware of such issues. To counter property specific issues, it isn’t always as straightforward as studying criteria, with the best option being to actively speak with underwriting teams to get their accurate, up to date stance.

When we delve into the reasoning behind these key criteria failures, the outcome is quite refreshing, especially when it results in us being able to help the client and obtain the result that they thought was out of grasp. Whilst there is never a guarantee they’ll be a solution to the objective, the chances significantly increase when taking the steps to have your case and your needs thoroughly assessed.

The simple solution here is taking time to assess your case, package accurately and accordingly, and familiarise with lenders individual criteria. In our professional capacity we find by taking these logical steps you’ll find those thoughts of strangling Mr Computer will certainly diminish somewhat, with the result leaning more towards ‘Mr & Mrs Customer we’re pleased to say the computer says ‘yes’.