Do local Crime Rates Have an Impact on Mortgage Acceptance

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With the current economic climate still up in question, many people are asking what will help them get accepted for a Mortgage? Or perhaps more importantly, what will hinder a mortgage application?

There are many factors that the Banks will take into account when deciding whether or not to accept your mortgage application. These can range from your income and disposable income, your credit history and your employment status. But do they look at the crime rates for the area into which you wish to buy?

Whilst there is no evidence to suggest a direct correlation between mortgage acceptance rates and crime rates for buyers, we should consider the statistics that may suggest this to people who are looking to buy. Generally, high crime rates occur in low income areas, effectively showing that there could be a knock on effect for Mortgage acceptance rates. However, it is much more likely that the reason why persons are being turned down for a mortgage is because of their income, rather than the local crime rates.

To then look at the same in reverse, may give a clearer explanation. Those buyers that are looking to purchase in a more expensive area, with a lower crime rate, are statistically more probable to be in a high powered job or on a high salary. Therefore again they would be considered for mortgage acceptance, but this would not correlate to the low crime rate in that area.

If you have been awarded a mortgage, you do still need to do your research into the neighbourhood in which you are planning to buy. Recent reports from a UK Bank show that a neighbour with an Anti-Social Behaviour Order (ASBO) can potentially lower the cost of surrounding houses by up to £31,000. It is therefore vitally important that you do proper research, check your seller’s information and speak to them openly about their experience with the local neighbours.

A high-crime rate may not effect your mortgage application, but it definitely could impact the cost of the property either when you come to buy, or when you come to sell. Local crime levels are extremely transparent and you can easily find them online, for any given area so it is always best to check them out, even if it is just for your own peace of mind and knowledge.

Advice for anyone that is planning to apply for a mortgage or has already been successful, be thorough in your research. Do not leave any stone unturned, as you may come to regret it at a later date if you do.

Good luck & don’t forget to have a look at our moving home guides and our report on local crime rates in your area