Are you in the market for a new house, or were you? Did the bank crush your dreams of home ownership? Just because the bank said no doesn’t mean that it must be the end. Using a mortgage broker will allow you the opportunity to exhaust all your options.
All banks and lenders have their own set of rules with respect to what they will and will not allow when it comes to approving a mortgage. Every lender has a different way to look at your income. Sometimes when you get a good underwriter you will find they will seek out every opportunity possible to make a deal work. I have those underwriters.
Did you know there 3 default mortgage insurers? Most know of CMHC (Canadian Mortgage and Housing Company). There is also Genworth and Canada Guaranty. The rates these 3 companies charge is all the same. Where they differ is on some of the product offerings as well as their underwriting guidelines. So, unless you’ve been turned down by all 3 you could still be exploring options. When an application is submitted to a lender, once they underwrite it they may submit it for insurance approval. If the first insurer they use declines the application, then they usually cancel the deal and your time with that lender is done. Mortgage brokers will use lenders that will just flip the application to another insurer or we will send it to another lender that will use a different insurer. I have managed to save quite a few deals that have been turned down by the bank.
Depending on how much money you have to put down I have lenders, several of them which offer alternative lending. Lenders in this space are more flexible on qualifying ratios, credit and income. These alternative lenders typically come with slightly higher rates. They price a mortgage application based on risk and are primarily focused on property location, type and the condition. When I place a client in to an alternative lending product, I do so with the idea in mind that it is to be used as a stepping stone. Generally, I do 1- or 2-year terms depending on the situation, so we can spend that time improving what is needed so that we can move a client into the best possible rates again.
At the end of the day it never hurts to get a 2nd opinion. Working with a Mortgage Broker, like myself you get someone who specializes in Mortgages. Sometimes when you go to a bank or financial intuition you are dealing with someone who specializes in their own product and may lack the experience and knowledge to get you that approval. Not only that, they may be limited in their underwriting or product availability. Using a Mortgage Broker will allow you to have all your options explored. It may result in your getting the approval vs. a decline.
