What Do I Do If My Mortgage Is Declined?

Three Strikes- You’re Out

A first-time buyer contacted me recently with a solid plan but a few challenges on his credit file- some late payments and a lower score than lenders prefer. We found a lender willing to work with him, but the first mortgage insurer declined the file based on his credit history.

In Canada, there are three mortgage insurers. When you’re putting less than 20% down, your mortgage needs to be insured, and not every insurer will approve every file.

We tried a second insurer, but were met with another decline.

At this point, we were working against a financing condition deadline. We needed an extension over the weekend to keep the deal alive and we got it. The third insurer reviewed the file and approved it. That buyer is now a homeowner!

Why Your Mortgage Broker Is Important

Not all lenders will go to a second or third insurer if the first one says no. For some, a single decline means the file is closed.

Working with a mortgage broker means having access to lenders who will exhaust every available path before calling it done. In this case, the difference between one insurer and three was the difference between getting the keys and losing the home.

If you’ve been told your mortgage won’t work, it’s worth getting a second opinion. Credit challenges, late payments, and lower scores don’t automatically disqualify you, they might just mean the file needs to be handled carefully by the right mortgage broker and routed to the right lender and insurer.

Whether you are preparing to buy your first home or your fifth, if you’re looking to get pre-approved for a mortgage in Edmonton, fill out my online application. I’m here to help you every step of the way.