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New figures from moneysupermarket.com have revealed mortgage declines have increased by nearly 400 per cent in the past two years.

In 2007, the website says that roughly 2.3% of vetted mortgage applications were rejected; however, this has risen to 8.8% so far this year.

Louise Cuming, head of mortgages at moneysupermarket.com, says: "Lending criteria has become too strict – even vetted applications that we would expect to be accepted without a hitch are being rejected.

"Credit histories play an important part in the process and any blemishes will make finding a mortgage increasingly difficult. All debt repayments – credit cards, loans, store cards etc – must be made on time. Details of all missed repayments are held on your personal files for six years and may count against you when your credit rating is accessed."

These numbers prove that assessing affordability is key for lenders and everyone has to be much more realistic about what they can borrow. The most anyone can reasonably hope for is four times their salary right now – anything over this is more likely to be rejected. And you can't expect lenders to take overtime or commission into consideration when they assess affordability, they are likely to base the maximum lending purely on your basic salary.

Also, if you are going to get accepted for a home loan you will need a large deposit – 10% is really the minimum at the moment. On top of that you must ensure that your credit score is as clean as it can be, that all your papers are in order and all your debts paid on time.

The positive thing to come out of this is that almost 92% of people who try and get a mortgage are accepted – that's a lot of people. If you want to be one of them, talk to a mortgage adviser about what you need to do to be given the green light for a mortgage that works for you.

SOURCE: Moneysupermarket.com, 16/04/09

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