Looking for flexibility with your next mortgage?
You might need to enter the world of mortgage brokers to get the flexibility you need…
When it comes to a new mortgage or home equity loan – your bank is not the easiest nut to crack. If you’re looking for financing, mortgage brokers may have more to offer you. Your bank may have something for you, but it might not be at the bank’s best rate.
At Turnedaway.ca we often hear stories about banks making offers that do not reflect their best rates. Of course, any rate is a “good rate” if you haven’t got an alternative.
Most people don’t realize that they have alternatives to consider. If your credit is less than perfect or you have a low income, your alternatives may be all you’ve got to consider! The bank might turn you away for financing or offer you a rate and terms that won’t help you get ahead.
Your search for financing doesn’t have to end there. Flexible mortgages do exist and mortgage brokers know where to find them. A qualified mortgage broker gets mortgages approved by fitting the right lender with the right borrower. So if you need flexible terms, we’ll connect you with a lender who understands and is willing to work with you.
How do mortgage brokers get you approved when you’ve been turned away by your bank?
Mortgage brokers have access to a wide variety of lenders. With access to more lenders, a brokerage firm has a distinct advantage over any single bank. Brokers know their lenders and what they want, this makes it easier to match borrowers with lenders who will be able to help. Most of the major banks have very strict lending criteria. The Bank of Canada doesn’t want major banks to approve mortgages for borrowers carrying a lot of personal debt. For this reason, if you’ve got debt you may not qualify with your own bank, but you may qualify with a competitor.
For the average borrower choosing a lender can be challenging because you can’t be sure who will approve your application if your bank has turned you away. Not knowing where to apply also means that you have no guarantee you are getting the best rate out there.
An experienced mortgage broker has the knowledge and relationships you don’t have. Connections and insight can make all the difference in the world. Mortgage brokers use industry knowledge to get you approved by matching your circumstances to a lender who will offer you the best rate.
Common circumstances that can lead to a declined mortgage application…
In addition to in-depth mortgage product knowledge, a good mortgage broker can deal with a variety of challenging situations. Major Banks can decline clients for a lot of reasons and mortgage brokers know the way around these roadblocks. Common reasons for banks to turn down your application include:
- Inability to prove the income you declare on your application because your income is non-traditional or from self-employment.
- Low income/inability to get a higher paying job or temporary low income (such as employment insurance if you’ve lost your job).
- Bad credit, poor credit score, or damaged credit history in need of repair.
- A past or current bankruptcy on your record.
- A past or ongoing Consumer Proposal, debt management plan, or consolidation program.
Mortgage brokers can work with bad credit.
The Bank of Canada doesn’t want major banks to lend to people with bad credit. Your current score and credit rating will be used to judge your loan eligibility. Banks rarely consider what you have done in the past to maintain your credit rating when it was good. Major banks don’t consider the circumstances that may have caused your credit score to drop.
Mortgage brokers often hear stories from clients who have “never missed a mortgage payment”, but still their bank won’t finance them. People who have positive credit histories spanning 20 years or longer but suddenly find themselves sick or out of work – yet the bank won’t help them.
We understand that you’re partial to the bank where you do most of your financial business. However, to your bank, you are an equation. If the result of calculating the risk you pose as a borrower in the bank’s eyes turns out not to be in your favor – your bank will have no problem walking away from you. Mortgage brokers will stick with you until you’ve found the bad credit mortgage you’re best suited for. Even a previous bankruptcy or missed credit card payments won’t decrease your eligibility for mortgage financing somewhere. If you have bad credit, deal with an experienced broker that can match you up with a lender who will approve your application.
About Mitigating Risk and Managing Loss
So your bank may find a few reasons to decline you. In fact, your bank may find more reasons to decline you than they find to approve your application. Banks are held to strict rules and thus are extremely risk-averse and reserved.
Risk aversion and risk management are key to managing losses for big banks. With so many borrowers to manage, your bank has to draw the line somewhere – they can’t lend to everyone. For those who can’t borrow from the bank, there are private lenders waiting to help. While the bank representative you deal with may truly want to help you, they may also be stuck with rules that they’re unable to bend or break. Don’t take it personally, it’s not you – it’s them.
Mortgage Brokers Give You Options – Options are Good.
A good broker will have at least 50 lenders to select from and they’ll know the criteria for each one. Good mortgage brokers can always find a way around issues such as hard-to-prove income and poor credit. Your past or temporary present conditions do not have to dictate your loan eligibility. If you’re frustrated with your bank, credit union, or current mortgage lender, you should be considering a mortgage broker. Let us give you your best options – options are good, and we get mortgages approved!
