What Happens When a Mortgage Renewal is Declined?
A mortgage renewal is a renewed agreement between the borrower and the lender to extend the mortgage term or renew terms of the mortgage.
Your mortgage renewal could be denied for several reasons including a delay in monthly payments, a bad credit score or a loss of income resulting from a change of job or loss of employment. Sometimes, a new lender, if you are switching to one, too can reject your renewal.
If you are looking for a new lender to renew your mortgage with, Banyan Venture Partners can help. With a vast network of private lending services in Markham, we can connect you to the right lender.
When a mortgage renewal is declined, here are some of the things that could happen:
Traditional Lenders Will Reject Your Application
Lending and renewal processes in traditional financial institutions such as major banks and credit unions in Canada are governed by federal laws.
So, if your mortgage renewal has been denied by your existing lender because of a falling credit score or a worsening financial situation, the chances of other conventional financial institutions rejecting your renewal are extremely high.
Be Prepared to Pay High Interest Rates
Even if traditional lenders agree to renew, the interest rates can be very high, especially if you
have a poor credit score. The renewal terms can be rigid too.
The Renewal Process Can be Time-Consuming
Even if you switch to a new lender, the approval process can be quite time-consuming. The lender is more likely to put you through an exhaustive process to assess your eligibility for renewal. This would include a fresh review of your financial profile, credit score and general background.
Going through the entire process again does not guarantee loan approval though. Your renewal could still be rejected.
You May Face New Expenses
If your new lender approves your renewal, what you’ll face next is a line-up of expenses for a property appraisal, fees to close your mortgage deal with the previous lender, new costs for renewal with the new lender and the costs for covering for legal aspects.
If your lender is not keen on renewal and you cannot afford the expense of switching to a new lender, it’s a good idea to go to a private lender. Private lenders assess the mortgaged property and not your credit score, which means the chances of loan approval are high even if you are in debt.
As an experienced mortgage consultant, Banyan Venture Partners can provide expert financial advice and connect you with different private lending services in Markham that match your needs.
Whether you are an individual with a bad credit score or an unstable income, or a business
facing bankruptcy, our network of lenders in Markham offering private lending services
can help. Get in touch with us today to know your options.