What to Do If your Mortgage Renewal Is Denied

Mortgage Tips Krishna Menon 18 Jun

When you take a mortgage against a property or any other collateral, you are provided with a fixed term within which you are expected to pay the amount of your mortgage. During this time, you can choose to stay with the lender you are currently working with or you can even opt for another lender. There are many rates and plans out in the market which your mortgage broker or mortgage agent can help you sift through. They can also help you through the process of applying for a mortgage renewal and also with making your documents ready and up to date.

Can your mortgage renewal claim be denied?

Yes, it can. There are two major reasons why your claim may have been denied. The first is that you have not made consistent monthly payments to your lender. This can prevent your current lender from taking you on again. The second reason is that you may have a bad credit history. This could make the new lender you want to work with, deny your mortgage renewal claim. So, what should you do in such a situation?

What to do if you are denied?

  • The denial would mostly be because you have defaulted on your payments. The lender also checks if you are under financial distress when you are reapplying for your mortgage plan. If you are denied by your current lender or your bank, you can opt for mortgage renewal schemes from financial institutions or poor credit financers. They can get you flexible rates and they have a higher risk tolerance than banks for lending.
  • A new lender whom you are applying to because your old lender denied your renewal or because you want to shop for new rates and plans can deny you too. When you are applying for a new lender, you need to start afresh and requalify for a loan. This means, that if you have the bad credit history, you can not qualify. But, this is usually the next step for people who have been denied by their lender.
  • If you are denied by a new lender and a financial institution as well, you can opt to go to a private lender. They do not follow the traditional norms of the lending community and can provide good rates. You should consult a mortgage broker before applying to see what they can do. They may be the solution.

Few Questions to Help Choose the Right Mortgage Professional

Mortgage Tips Krishna Menon 5 Jun

Mortgage agents are your one stop shop for all your mortgage needs. There are lots of benefits to working with a mortgage professional. They can get the best rates and the best plans to suit all your needs with ease. They have a wide access to lenders and can ensure that you have a variety of rates to choose from. But how do you find the right mortgage agent? Here are five questions you can ask a mortgage professional before hiring them:

  1. How much experience do you have?
    This is the first question you need to ask your mortgage agent. This ensures that you know you are working with someone who has dealt with cases similar to yours and can offer the best solutions to you. This also means that the mortgage professional is able to assess your needs and can really speed up the process for you.
  2. What number of lenders do you have access to?
    The above question, when asked the mortgage agent, can help you understand what your choice at the end will look like. The number of lenders the mortgage professional has access to, the more variety you will have. This also means that the mortgage agent is a trusted individual who is well connected and can really get the best rates for you without a hassle.
  3. Are they part of a franchise or local?
    Mortgage professional who belongs to a franchise is constrained by the norms of the company. In contrast, mortgage agents who work independently can help you get the best and local rates while keeping your interest and not the sales margin as their top priority. This can help you ensure the most individual service from them and also that they will guide you.
  4. What would be the extra costs?
    Any experienced mortgage professional will let you know the costs which are to be expected and may also provide you a list which will suit your financial status and requirements with ease. The mortgage agent will be upfront about the rates and costs.
  5. How will the mortgage professional be paid?
    This is a very important question to ask the mortgage agent. You must know if they are working for a commission from the lender or they will require you to pay the sum. If they require you to pay, how much and why should be found out.