What to Do if Your Mortgage Renewal Gets Denied because of Bad Credit
If your bank refuses a mortgage renewal with your bad credit, it isn't a reason to panic. With a little planning and the help of a mortgage broker, you can get approved for a new mortgage and keep your house. Here are a few simple steps you can take to obtain financing.
Work with a Mortgage Broker
Working with a mortgage broker can help you find a new mortgage when you have been denied a mortgage renewal with bad credit. This is because a mortgage broker has access to lenders and loan products that aren't available directly to the general public. While these lenders will still review your credit history, they generally have less stringent borrowing rules than banks and other "traditional" financial institutions. An expert mortgage broker knows these borrowing rules and will help you navigate them.
Be Honest
Even bad credit lenders will do their due-diligence. Your mortgage broker needs to know all the details of your current financial situation in order to find the right lender. It is understandable to feel worried that you won’t get approved, however being upfront and fully disclosing your situation will help prevent a lender from backing out after you have already incurred legal fees or other costs. Getting declined early in the process for free is better than getting declined later with costs.
How Does Your Mortgage Broker Choose a Lender?
Being denied for a mortgage renewal with bad credit may impact which options you have. There are also many other variables your mortgage broker must consider, such as:
- Some lenders allow for mortgage arrears and some do not
- Some will only lend up to 65% of the value; some will lend up to 85%
- Some will allow collections to remain unpaid, but not all
- Different lenders have different minimum credit score requirements
A mortgage broker will review your application to identify any issues that are preventing you from obtaining a mortgage renewal with bad credit. An expert mortgage broker will have many lenders in their tool-chest and will wade through the above policies when trying to get you approved.
Get Approved for a New Mortgage When You’ve Been Denied a Mortgage Renewal with Bad Credit
Having a less-than-stellar credit history can make getting a mortgage more difficult, but partnering with a mortgage broker and being honest about your situation will greatly increase your chances of obtaining financing. Contact us today for more information if you have been denied a mortgage renewal with bad credit.
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