What are your options if you are denied for a mortgage renewal?
Finding out that you have been denied for a mortgage renewal can be quite scary and stressful. Does this mean you will have to sell your home? What will happen to your family? Fortunately there are options. In this blog we will take you step by step through what you will need to do if your mortgage renewal has been denied.
When your mortgage renewal has been denied by your current lender.
While not common, it is possible that your current lender may deny your renewal if your credit score has dropped or if you are not in good financial health. If this happens, you should contact your mortgage broker right away to help you find a new lender.
When your mortgage renewal has been denied by a new lender.
Perhaps you saw another lender advertising a better mortgage rate but when you approached them for your renewal you were denied. Your best option in this scenario is usually to simply renew with your current lender.
Steps to take when your mortgage renewal has been denied.
If your mortgage renewal has been denied, there is a chain of steps that you should take. To go through this chain as efficiently as possible, it is best to do so with the help of a professional mortgage broker.
- You will get the best mortgage rates if you are able to renew your mortgage with an “A” lender – these are banks, credit unions, etc. If however the A lenders are denying your mortgage renewal, your next step is to approach “B” lenders. B lenders are institutions that specialize in working with people with damaged credit.
- If your credit is too low even for a B lender to take you on, you should talk to your mortgage broker about the option of renewing your mortgage with a private lender.
- Finally if you are unable to renew with a private lender – or if you decide that this option isn’t for you, then it is time to consider selling your home.
While it is rare for this process to get to the point where you might have to sell your home, there are some drastic situations where this may be your best option. At this point you may also want to consult with a credit counsellor so that you can start the process of repairing your credit.