A mortgage capacity report is a crucial document that outlines how much you can potentially borrow based on your financial situation, including income, debt, and other obligations. However, there may be instances where the report doesn’t seem accurate or doesn’t reflect your true financial capacity. If you find yourself in this position, it is possible to challenge a mortgage capacity report. Here’s a guide on when and how to do so, as well as what steps you can take to ensure the report more accurately reflects your borrowing power. When Should You Consider Challenging a Mortgage Capacity Report? There are several reasons why you might feel the need to challenge a mortgage capacity report: Incorrect Financial Information If the report is based on incorrect data, such as outdated salary figures, incorrect debt levels, or overlooked sources of income, it could undervalue your borrowing capacity. Discrepancies Between Lenders If you’ve received multiple reports from different lenders, and they vary significantly, it’s worth investigating whether one report is based on incomplete or inaccurate information. Unusual Income Sources For those who have irregular or non-traditional income streams (such as bonuses, freelance income, or dividend payments), a standard report may not accurately assess your financial capacity. This could result in a lower mortgage capacity than you’re eligible for. Change in Financial Circumstances If your financial situation has improved since the report was issued — for example, through a salary increase, new investments, or a reduction in debt — the report may no longer be valid and could warrant an update or challenge. Steps to Challenge a Mortgage Capacity Report If you believe your mortgage capacity report is inaccurate, here are the steps you can take to challenge it: Review the Report Thoroughly Start by going through the report in detail to ensure that all information is correct. Pay attention to figures such as income, expenses, outstanding debts, and assets. Verify that no financial information has been overlooked. Check Your Credit Report Your credit history plays a significant role in determining your mortgage capacity. Make sure your credit report is accurate and up to date. If there are any errors in your credit report (such as misreported debts or missed payments), you should address these before challenging your mortgage capacity report. Update Financial Information If there have been changes in your financial circumstances since the report was generated, provide updated information to the lender or mortgage broker. This could include proof of new income, a reduction in debts, or improved credit scores. Speak to a Mortgage Advisor A mortgage advisor can provide expert advice on whether your report accurately reflects your financial situation. They may also be able to liaise with the lender on your behalf and offer guidance on improving your borrowing capacity. Request a Reassessment Once you have corrected or updated any information, you can ask the lender to reassess your mortgage capacity. This may involve submitting additional documentation, such as recent payslips, tax returns, or bank statements, to support your claim. Consider Alternative Lenders If you believe one lender’s report is not reflective of your true capacity, you may want to approach other lenders. Different lenders have varying criteria and might be more flexible in assessing non-traditional income or higher risk factors. Factors That Could Influence the Outcome Challenging a mortgage capacity report may not always result in a significant change. Several factors can impact how much lenders are willing to offer: Affordability Checks: Lenders will still run stringent affordability checks based on your income and outgoings. If they believe you may struggle to make repayments, they might be cautious, even if your report appears more positive after reassessment. Debt-to-Income Ratio: A high debt-to-income ratio could still limit how much you can borrow, even if you’ve corrected other errors in the report. Market Conditions: External factors, such as changes in interest rates or economic conditions, might affect lending decisions. Even if your personal circumstances have improved, broader economic issues may lead to conservative lending practices. Preparing for the Best Outcome To ensure the best outcome when challenging a mortgage capacity report, it’s essential to: Maintain Good Credit: Regularly monitor your credit report and resolve any issues promptly. Minimise Debt: Lowering your outstanding debt can significantly improve your mortgage capacity. Provide Comprehensive Documentation: Gather all financial documents to support your case for reassessment, including payslips, tax returns, and any proof of additional income sources. Plan Ahead: Consider consulting with a financial advisor or mortgage broker before applying for a report to ensure that your financial situation is as strong as possible. Conclusion Challenging a mortgage capacity report is entirely possible, especially if you believe it does not accurately reflect your financial situation. By taking the right steps — from reviewing the report thoroughly to updating your financial data and speaking to experts — you can improve your chances of securing a mortgage that truly reflects your borrowing power. However, it’s important to be realistic about the factors that influence a lender’s decision, as external conditions and affordability checks will still play a significant role in the final outcome.