What happens if your mortgage renewal is denied in Canada?

There are several strategies that you can focus on when your mortgage renewal application is denied. You can consult with the brokers at sHelto who can provide more information about how to get your mortgage renewed.

Lenders can review multiple factors during the renewal process, such as credit score, income levels, payment schedules, and mortgage terms. These can be critical for internal review processes, along with your debt service ratios and overall credit worthiness.

It is important to note that you may have to go through multiple renewal processes as several people focus on multiple mortgage term based renewal through the amortization period. That’s why consulting with a mortgage broker can be helpful during the renewal process, whether you’re focusing on an existing lender or a new one.

 

Understanding core reasons why your renewal may be denied

You can start by understanding some of the common reasons why your mortgage renewal application may be denied. You can also focus on these factors to start improving your overall borrower profile.

Low credit score

A poor credit score can be an important factor for lenders to consider when it comes to mortgage renewals. Whether that be a private lender or a bank, your credit score will be an important parameter to determine creditworthiness and whether you will be able to make payments for your mortgage.

Lower income

Your current lender may deny your request for renewal if your employment status has changed or your income has lowered since when you had first applied for the mortgage. Mortgage brokers can help with understanding your unique situation, so that they can ensure that you’re ready for the application process when talking to a mortgage lender.

High debt

Your debt to income ratio is also an important factor when it comes to mortgage renewals. You can have a higher debt built up over the mortgage term, which can be above the threshold levels for the lender. You can also have higher debt that may lead to lower credit worthiness over time.

Mortgage stress test

The mortgage stress test is an important tool during the renewal process to ensure that the interest rates work for you and you’re able to make the payments as per the structure. Your mortgage stress test will be one of the most important factors in understanding whether you’re an eligible borrower for a renewal.

Missed mortgage payments

If you’ve missed mortgage payments in the past then your lender may be less likely to provide renewal for your applications. You may have to opt for alternative lenders or B lenders who can provide financing to you and help you get the right mortgage terms.

Follow these strategies if your renewal was denied

It is important to know what happens if your mortgage renewal is denied, which is why you can reach out to our experts to learn more. You can also focus on improving your credit score and enhancing your overall income to get renewal expedited for your case.

Consulting with a broker

A broker can help you connect with B lenders and private lenders who can provide financing for your mortgage. They may be able to provide renewal options when your traditional banks or lenders may have denied your application.

Extend amortization period

You can work with your existing lender and extend your amortization period to get a better monthly mortgage payment structure. You can effectively lower your payments but may take longer to pay off the complete mortgage, depending on your financial situation.

Improve credit score

You can improve your credit score by making the monthly payments on time. This can positively affect the mortgage renewal application process by showing high credit worthiness. You can also order a credit report and fix any issues present in it to show a good credit score.

Co-signer

You can bring a co-signer who can help when your denied mortgage renewal process isn’t allowing you to get a renewal approved. If the guarantor has a positive credit score and is able to sign-on, then you may be at a more favourable position when asking for a mortgage renewal.

Lower debt

You can lower your overall debt obligations to show better debt to income ratios when you’re applying for a renewal. You can also focus on making monthly payments for your debts in a timely manner, so that you’re able to improve your credit worthiness.

Are you at a higher risk of being denied by a new lender or an existing one?

You are a higher risk of being rejected by a new lender, if your credit score and income levels aren’t as per the internal parameters during reviewing.

Unknown financial criteria

In some cases, some new lenders may consider your mortgage renewal riskier as they may not have a clear idea of your ability to make monthly mortgage payments. You may have to consult with a mortgage broker to understand whether there is a risk of mortgage renewal denied for your application.

New review process

There will be a new review process that will require new documentation, waiting periods, and protocols to follow when applying. You will also have to ensure that you’re able to clear the internal debt service ratios, and other parameters when you are applying for a renewal process. The interest rates may also not be favourable depending on your existing parameters.

Different internal factors

A new lender may have different lending factors that may not allow for seamless mortgage renewal for your current mortgage scenario. You may experience new sets of challenges, as each lender will have their own threshold for how much they’re willing to lend based off your credit score, income, etc.

Reviews & recommendations

Praise Pour In : Clients Share Their Delightful Experiences and Stellar Recommendations

Mista BenzMista Benz
15:54 19 Dec 24
Very professional. Great experience dealing with Furqan Iftikhar. He is very helpful and makes the process very easy to make your deal successful.
SkylarkaSkylarka
14:41 18 Dec 24
Had a pleasure working with sHelto Mortgage during the home buying process. Furqan Iftikhar provided support each step of the way, from initiation to loan closure. Would highly recommend their services for home buyers.
Sumit GargSumit Garg
11:51 18 Dec 24
Suman is very knowledgeable with mortgage products and guide his clients thoroughly with his experience in the process of mortgage approval from lenders .
Hammad KhanHammad Khan
05:20 18 Dec 24
Had a great experience with them specially Furqan he treats you like a family not a client.
Anish MenonAnish Menon
04:51 18 Dec 24
Very professional and knowledgeable team to work with. Absolutely recommend.
Rajiv AroraRajiv Arora
03:51 15 Dec 24
Shelto is a MUST go place to get solutions for your financing challenges whether it is mortgage, heloc, last minute rush . You will experience a knowledge powerhouse with a focus to share and explore every possible solutions . Staff, Agents and Principal broker always available to answer your concerns and love to go Extra Mile for their valued client to find perfect option for clients. If you wish to join as Mortgage Agent then this is the place to equip yourself with all tools and resources to surf the challenges of mortgage industry. Highly recommended.
Chetan AnanthulaChetan Ananthula
14:56 01 Nov 24
Me & my wife, we recently had the pleasure of working with Mandy as my mortgage agent, and I couldn’t be more grateful for her exceptional service and expertise. From the very beginning, Mandy took the time to understand my financial situation, future goals, and all the nuances that come with securing a mortgage. She patiently guided me through every step of the process, answering all my questions in detail and ensuring I felt comfortable with each decision.
Priyamsha PadigaPriyamsha Padiga
14:53 01 Nov 24
Working with Mandy was not only a professional experience but also an emotional relief. Her warmth, patience, and expertise helped ease the stress of the mortgage process. She truly cared about my needs, taking time to explain every detail and finding options that perfectly suited my situation. Mandy’s dedication and professionalism made me feel supported and confident from start to finish. I couldn’t recommend her more highly—she’s the kind of agent who goes above and beyond, both personally and professionally
Narasimha VelichetyNarasimha Velichety
00:02 31 Aug 24
I had an incredible experience working with sHelto. They made the entire mortgage process smooth and stress-free. Their team is knowledgeable, responsive, and truly dedicated to finding the best rates and terms for their clients. I couldn’t be happier with the service I received!
Moe MOEMoe MOE
23:53 29 Aug 24
Great service, Mohsin and Furqan helped me with my refinance and buying an investment property. Mohsin is very dependable ,easy to get a hold of and patient. He made this stressful process very easy-going for me. although I had many questions, He always carved out time to answer all of my questions and explained why. I was very hesitant at first to go with these guys however, now I am glad I did and I met Mohsen. I truly believe these guys can help anybody in any situation for their mortgages. They became a one stop shop for me. I did not have to contact anybody. They did all the work for me. I highly recommend Mohsen. ThankYou guys for helping me in this process two thumbs
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