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.