Steps To Take After A Mortgage Renewal Is Denied
Matrix Mortgage Global – Steps To Take After A Mortgage Renewal Is Denied
When the term of your current mortgage reaches its maturity date, you have to renew the outstanding balance for another term. This process is called a mortgage renewal. Depending on the terms of your mortgage this is a process you may have to repeat quite a few times until you get your mortgage paid off in full.
To begin the process your current lender will send you a renewal offer in the mail just before your term expires. The offer will include a new mortgage rate plus term. The term most often will be for the same length as your current term. The renewal offer will also include a slip that you can sign and return confirming your agreeance to the renewed terms. (Of course, here at Matrix we recommend that you compare other lenders before doing this).
Unfortunately signing and returning the slip does not guarantee your mortgage will be renewed as offered. This is why once you have a mortgage, it is important to maintain a good credit score. Even though your current lender does not need to re-qualify you, they will still review your current financial situation, including your credit score, any new debt you may have incurred, and any changes you may have had to your employment. If they find that your situation has changed significantly and feel your ability to pay may be impacted, they can deny your renewal.
Your next steps depend on who your current lender is. If your current mortgage is with what we call an “A” lender such as a bank or a credit union, they have very strict guidelines and you may still be able to find a “B” lender that can work with your individual situation. A “B” lender is usually trust companies or bad credit institutional lenders who specialize in working with people who have lower credit and higher debt ratios. This, of course, comes at the price of higher interest rates but once you find yourself denied by the major lenders this is the next best option.
In the event that your credit has reached the point that the “B” lenders are unable to offer you a renewal, you are left with the option of either seeking a private lender or selling your home. Well, it is not often that a mortgage renewal gets to this point, if your finances have deteriorated to such an extent selling may just be your best option until you get yourself back on your feet and can meet your monthly obligations.
If your mortgage is up for renewal give us a call today at Matrix Mortgage Global at 1-800-542-0601 to discuss your options.