Your maturity date on your current mortgage is quickly approaching, so it’s time to renew for another term? What if your renewal get denied? What happens next?
Well, you can expect that your lender will send you a renewal offer prior to your term expiration date via regular mail. Your renewal offer should include your new mortgage rate and term, along with a document for you to sign that allows you to easily sign, accept the offer and mail it back. Although this makes it more convenient for you, it can also end up costing you. When you loan reaches maturity, it’s one of the best times to consider other lenders.
Now this doesn’t mean you’re automatically approved. So what if it’s denied? It doesn’t imply that this will be the case with other lenders, you simply just have to choose another lender. If you’re working with a broker, then you already know they have a large network of lenders for you to choose from.
If you’re wondering why you may have been denied, let’s explore a couple reasons.
Why You Were Denied By Your Current Lender
Yes, it’s renewal time and you might really be hoping to stay with your current lender because you’re quite happy with them. You have good reason and doing so with also mean that you don’t have to re-qualify. So long as you’ve made all of your on-time payments, your mortgage renewal application will most likely be approved.
However, if your financial situation has changed causing just reason for concern they may flat out deny your renewal. This includes, but is not limited to:
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Your credit score
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Increased debt that you cannot afford
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Employment status and stability
Why a New Lender Said No?
Well a new lender doesn’t know you or your finances, therefore you’ll be required to complete and submit a new mortgage loan application with your renewal. This makes your chances of denial higher, especially if you missed payments or there have been changes in your credit or employment.
What’s Next?
If you’ve been denied by both your current lender and a new lender, you’ll need to consider other options. For instance, if your current lender is a bank, then you might want to consider going with a mortgage broker and if they can’t get you approved then a private lender is your only other option, apart from selling your home.
It’s extremely rare for you to have to sell your home as a result of denials from every lending option available to you. However, if there have been some very drastic changes to your finances or credit, then it’s definitely still a possibility.
Make your payments on time and the current lender will have no problem renewing you. If you want to look into other lenders speak to your mortgage broker today.
When we say Yes! We stand behind our promise.