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.

5 Reasons your Self Employed Mortgage was Denied

Mortgage Tips Krishna Menon 21 May

Self-employed mortgages are obtained by people who have businesses of their own. This type of mortgage is already tough to obtain the income may not be what a normal employee may be able to guarantee. There may have been cases where your self-employed mortgage claim may have been denied. Here are the top five reasons this could have happened.

  1. Your income on paper isn’t attractive.
    Many self-employed individuals tend to present lower figures of income that they originally receive for tax reasons. But this makes you eligible for lower self-employed mortgage plans than you are actually allowed to receive. This can be avoided by planning your mortgage and presenting an increased amount in the two years prior to the claim.
  2. Credit scores are important but so are debt ratios.
    Every broker will tell you that you need a good credit score. While that is true, concentrating on your debt should also be a priority. Self-employed mortgages can be obtained easily if the lenders feel you can pay off your debts. However good your credit score, if you have too much debt when compared to your monthly income, you may have high chances of being rejected for the self-employed mortgage.
  3. Minimum or no credit history.
    Paying for things in cash may seem like a good option at the time but it contributes to you having little to no credit history. Lenders and banks require credit history as proof that you can pay off your debt. They see this as a proof that you will be able to handle and repay your self-employed mortgage. Having no credit history will not make you seem reliable. Hence it is important to maintain a good credit history to maintain a good credit score.
  4. You don’t have proof of income to support your claims.
    As a self-employed individual, you may have had the capacity to be paid in cash and would have shown fewer figures on your income tax forms. While this is beneficial to you, the case is opposite when it comes to claiming a mortgage. You need to have reliable proof of income to support your claim.
  5. Didn’t seek a broker.
    It may seem like a trivial concern but actually having a professional on your side can help you secure your mortgage with ease and speed.

When and How to Get a Mortgage Pre-Approval in Ontario

First Time Home Buyer Krishna Menon 1 Nov

In order to save time and avoid issues that arise when buying a home, you need to get a mortgage pre-approval. It’s a vital step in the home buying process that should not be overlooked. This step is basically the determining factor of how much you can afford to spend on a home, which will provide you with your shopping budget. Mortgage rates can sometimes increase during your home search, so another great benefit to get pre-approved for a mortgage is you can lock in your mortgage rate.


Mortgage Pre-Approval: What Is It?


To put it simply, a pre-approved mortgage is a process, that gives you access to the vital information you’ll require during your home search, such as:


  • How much you can afford to spend on a home
  • The amount on your monthly mortgage payments (based on your maximum purchase price)
  • First term mortgage rates


There is no cost to getting pre-approved for a mortgage in Ontario, and there is also no requirement to commit to a particular lender. However, it’s important to keep in mind that just because you get pre-approved, that doesn’t mean your mortgage interest rate is guaranteed. You need to lock in your rate. This will protect you, should interest rates rise. Also, just because you lock in your rate, that also doesn’t mean that if rates drop, you won’t reap the benefit. Most times your lender will honour the rate drop too.


Why You Need a Mortgage Pre-Approval


There are several benefits to getting pre-approved for a mortgage, including:


  • Saved time during your home search allowing to only search for homes that are within your price range
  • It shows your real estate agent that you’re serious about buying a home
  • Makes your service experience more pleasurable, as it’s both faster and extremely targeted
  • Tells sellers that you won’t have an issue in financing the sale, improving your chances to compete with other offers on the table
  • Allows you to lock in a rate, while still having the ability to get a lower rate if rates fall during your home search


How-to Get a Mortgage Pre-Approved


In order to get a mortgage pre-approved, you’ll first need to meet with a mortgage broker. A mortgage broker has access to a network of lenders and they are the best resource to have on your side. They’ll help you determine your budget and collect or gather any supporting documentation you’ll require.


  1. Your Credit Score. Lenders will want to measure your financial health so they can determine the level of risk associated with lending you money for your home purchase. Quite often if your credit score falls between 680 and 900, you can qualify for a mortgage. You’d qualify to borrow from an “A” lender, which could be a well-known financial institution such as BMO, TD Canada Trust, etc. However, if you’re credit score falls between 600 and 680, then lenders may look at other financial details in order to determine if you’ll qualify for either an “A” lender, or a “B” lender. Now, should your credit score fall below 600, you’d only qualify to borrow from a “B” lender, and you most likely won’t get the best mortgage rates offered today.
  2. Your Down Payment. Your down payment requirement could range from 5 to 20 percent. If you pay down 20 percent or more, then you won’t have to purchase mortgage default insurance. But, anything less than a 20 percent down payment would require an additional mortgage insurance purchase, for lender default protection.
  3. Your Debt Service Ratios. Lenders will determine your maximum monthly mortgage payment by calculating your debt service ratios. These calculations include factors such as you income per month, monthly expenses and your monthly debt payment amounts and over, as well as overall debt. They basically want to ensure your can afford your monthly mortgage payments.
  4. Supporting Documents. The documents you’ll need to provide to your mortgage broker for your mortgage pre-approval can vary. It all depends on the mortgage broker and lender you choose to work with. However, just to give you an idea, here are some of the documents you may be asked to provide:


  • Your ID
  • Income proof such as pay stubs, an employment letter, or your income tax assessment
  • Banking financial and other investment statements – shows you have your down payment covered and that you can cover any closing costs
  • Proof of any/all assets
  • Any/all documentation in relation to your debts


To start your pre-approval now, get in touch with us today.


Mortgage Tips Krishna Menon 9 Aug

For businesses large and small, a loan may be needed to overcome financial distress, purchase real estate, or acquire equipment to make their jobs easier. Business loans come in all sizes and for use in every aspect of business. Depending upon the size, age, and niche of your business, you can find available funding for every financial need that you can think of. The problem isn’t the availability of funding, it is the turndown rate of traditional banks that makes obtaining these loans so difficult. Businesses which have been turned down for a loan by a traditional bank often meet their ultimate end through failure. This is because business owners and representatives do not realize that alternative lending options exist and that they are easier to obtain than you may think.

What is Alternative Funding?

Dominion Lending Centres Leasing provides financing options for businesses who have been turned down for a traditional loan or for businesses that do not meet the requirements for a traditional loan. DLC Leasing matches businesses with lenders and investors within their network to provide funding outside of the traditional finance institutions. Brokers will assist business owners in finding the right loans to suit their needs and they will help with the application process as well.

Alternative funding is often grouped into specific niches. Lenders and investors will provide funding for certain needs rather than generalized financing. One lender may choose to provide funding for businesses which are in the construction field while another may choose to provide funding to businesses in retail or food service. This choice will often reflect the resources and network of the lender and will give the borrower a greater picture of where the money is coming from.

What Type of Loan Do You Need?

Every business is different and the needs of those businesses vary just as much. Where one company needs funding to pay for employee wages or utility bills, another may be looking for funding to purchase another location. The size of your business will be a determining factor for the amount of funding that you can receive. A larger business, with more income, will receive a larger loan where a small business will receive a lesser amount. Besides the size of your business, your loan broker will need to see detailed financial records, copies of your tax statements, and may even need to evaluate your accounts receivable.

When applying for a loan of any size, it is important to know what type of loan you need ahead of time. Here is an example of some of the most popular business loans available:

Equipment loan – Funds are used to purchase equipment for business use. Either to replace old equipment or to upgrade to more modern equipment. This can be used for large machinery and production equipment as well as office and restaurant equipment.
Real Estate loan – This type of loan is used to purchase real estate for business use. It cannot be used for personal real estate and will likely be calculated based on the business income.
Hard Money loan – Typically secured by real property and are often a few months to only a few years in length. Hard money loans provide funding to assist in a temporary financial situation or while your business is waiting for long-term financing to be approved
Accounts Receivable loan – The amount of this loan is based on your current accounts receivable and can usually be used for any financial needs of your business. This type of loan provides funding to help you get through financial distress because of money that you are waiting to receive.
Once you have decided the type of loan that your business needs, you will need to find a reliable, honest and knowledgeable commercial finance broker to work with. Research your broker to make sure that you are protected throughout the entire process.

How-to Choose the Right Length for Your Mortgage Term

Mortgage Tips Krishna Menon 24 Jul

While it’s common for most homebuyers to first consider mortgage interest rates when shopping for a mortgage, choosing the right length of your mortgage term is extremely vital as well.


Examining Mortgage Terms

Your mortgage term is also known as the term in which you’ll pay your mortgage. At the end of your mortgage term your lender will review your contract with you and re-negotiate your new terms with you. Once you choose the length of your term, it cannot be changed until your mortgage is up for renewal or your break your mortgage agreement. However, breaking your mortgage can come with extra fees and penalties.

Term Length

It’s quite unfortunate but a number of homeowners often overlook or don’t take short mortgage terms into consideration. As a result money is often lost. Home borrowers typically go for longer term mortgages for a greater peace of mind, but they are also required to pay a premium.

Interest rates can be uncertain, which is why your mortgage term is so important. Essentially, it can help you to determine how much interest you will end up paying. However, if you go with a closed mortgage, the interest rate you get is what you’ll be stuck with until the end of your term. No frills mortgages offer lower rates, but you can’t switch lenders during your term, only if your term ends or you sell your property.

Long vs Short Mortgage Terms

Long term mortgages are those of 10, 20 and even 30 year terms, whereas short term mortgages can be around 5 years.

Longer terms make more sense to some people, especially if you cannot afford to experience any increase in the amount of your monthly payments, or you don’t have at least 6 months of savings to cover your costs. A longer terms allows you to lock in without any worry.

There are circumstances that may call for a short term as well, depending on your needs.

How Your Credit Factors In?


If your credit is not that great, a shorter term may be best. Once you’ve paid on your mortgage for a year or more, it may allow you to increasing your borrowing amount while possibly reducing your interest rate. A short term eliminate the need to locking in at a high rate and offers a bit more flexibility for change in the future. Same goes, if you want to sell your home in a few years.


Choosing the Best Term


Choosing the best term may seem impossible or even confusing at times. Why not hire a professional to help you in your decision-making? A licensed mortgage broker can help you choose a product that meets your needs, and they’ll even factor in the level of risk you’re willing to take.


If you have questions about Canadian mortgage, contact us.

An Ultimate Guide to Mortgage Insurance In Canada

Mortgage Tips Krishna Menon 14 Jun

When you purchase a home in Canada, it’s one of the biggest decisions and investments you’ll probably ever make. Therefore, you’ll want to ensure that your large investment and your family is protected financially in the future, since life comes with many uncertainties.
In Canada, there are three different mortgage insurance providers:

● Genworth Financial Canada
● Canada Guaranty

You can ask your mortgage broker with insurance provider they’d recommend for you, have them provide more information on various the insurances offered by these companies, and find out how each one works.

Mortgage Protection Insurance (Life & Disability)
A large majority of Canadians are uninsured. Nearly 45 percent to be exact! This number includes both mortgage and life insurances. Although many people worry about their families when they consider what might happen when they die, they still remain uninsured. Pre-deceased family members may be left struggling, making mortgage payments on their own when the uninsured spouse dies.

Mortgage Protection Insurance can prevent this from becoming a reality, as it would pay off the remaining balance of your mortgage in the event either spouse’s death. At My Milton Mortgage, one of Dominion Lending Centres Top Producers, we offer mortgage protection insurance with great features. The insurance we offer is much better than traditional bank mortgage insurance. Our protection insurance includes:
● Portability, which means no loss of coverage or re-qualification at renewal time
● Premiums that don’t increase due to health concerns or age
● Both life insurance and total disability insurance protections
● Protections in the event of a death, serious accident or illness

Mortgage Loan Insurance
Mortgage loan insurance is not the same as mortgage life insurance. Since lenders require mortgage loan insurance when you make a down payment of less than 20 percent for your home purchase, it’s a way to protect lenders in case of mortgage default. This insurance allows home-buyers to buy homes with as little as 5 percent down, and similar interest rates to those who make a 20 percent down payment.

You lender will pay an insurance premium so that you can obtain mortgage insurance and they will pass this cost onto you. Payable premiums can vary depending on the purchase price of your home, this is a certain percentage. You can either make on lump sum payment for the premium, or you can be added to your mortgage. It will then be included in your monthly payments each month.

To apply for or learn more about Mortgage Protection Insurance contact a professional mortgage broker, who can walk you through the ins-and-outs of your mortgage life insurance, the costs and get the instant coverage you need.

To learn more about mortgage products, insurance or any other financial matters, contact us today.