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I had a couple calls in response to the addition
of the “We welcome bank declines” tag line that I added to our ½
page ad in the Mission Record last week. For the sake of brevity, I
will address both of these insightful questions in two parts over
the next week, along with my mortgage rate updates.
If one bank declines me, why would another approve me?
This is a common misconception, and part of the reason why Mortgage
Brokers now process 38% of all mortgages in Canada according to the
most recent
Deloitte study.
It is important to understand that no two Financial Institution’s
lending policies are the same. As an insider in the industry, the
variances in policies from one lender to another can only be
described as HUGE.
Methodology of rental calculations, basement suite incomes (not to
mention if they are legal suites or not), business for self income
calculations, debt service ratios, base rates used to calculate debt
service ratio’s for variable rate mortgages and conventional versus
insured, what credit card payment calculations are input (some use
3% of the limit whether drawn or not), minimum credit scores, and so
on and so on. My job as a Mortgage Broker is to know, inside and
out, each financial institutions constantly changing lending
policies; and to not only make sure that my clients are getting the
best rates, but the best product and financial institution that
meets my clients needs.
A contributing part of my mortgage volumes is actually from
experienced and seasoned lenders at various financial institutions
who refer clients to me whom they recognize as strong applicants,
but that just don’t fit their bank or institutions polices at this
time. What one bank or credit union cannot do, more often than not
another institution is rolling out the red carpet for that type of
mortgage application.
So if you or someone you know has been declined for a mortgage,
please don’t be discouraged!!! Just give me a call and I will be
only happy to review the situation. This is where my 26 years of
lending experience counts. Even if for some reason I am unable to
help, I will put a plan in place that if followed will ultimately
help that person realize their homeownership or mortgage needs down
the road.
Part II – Next Tuesday.
