One in three people turned down for a mortgage say they are depressed, new research shows.
A study by Haysto, an online platform specializing in mortgages for the self-employed and those with bad credit, also found that more than half of those rejected felt marginalized as a result of the process.
Another fifth of people said it had a long-term negative impact on their mental health.
Haysto works to educate borrowers in complex situations that they might still be eligible for a mortgage even if they had previously been rejected.
The company is also keen to tackle the psychological effect of mortgage rejection and is committed to donating a percentage of its profits to Mind, the mental health charity, to support those who have financial problems.
Paul Cross, co-founder of Haysto, said: “It is disappointing that the whole mortgage process remains surrounded by misconceptions and confusion because it has such a large and often unnecessary impact on mental health.
“Self-employment and poor credit history are on the rise in the UK, so a growing number of people applying for mortgages just don’t fit the traditional eligibility model. Many are rejected by traditional lenders and online platforms that cannot see past their situation, while others are discouraged at all.
“We want to help everyone access their dream home. Even though they have already been rejected, there are specialist lenders and brokers specifically for freelance and credit mortgages who can help.