What To Do After Your Mortgage Loan Is Rejected?

by Harold & Kim Hanmer 10/20/2019

Having your home loan rejected can be disappointing, but it is not the end of the road. This article is full of ideas to help get your loan approved on your next try:

Re-edit your borrower profile

Banks are vigilant on all aspects of credit, including the profile of the borrower. Remember that many criteria are crippling. Any episode of overdraft is out of the question and better pay off consumer credit. Be sure to review and resolve any errors on your credit report.

Call a broker 

These intermediaries compete with borrowers. They refine your file and present it to the right banks since they know the criteria and the commercial policy of all its financial partners. Then the borrower has to choose the best offer. In most cases, the broker will get a small commission for obtaining the loan on your behalf. 

Increase your contribution

Check if you can increase this. That way, the bank will be more reassured, mainly as you will borrow less or assure them of a shorter repayment period. How do you improve your contribution? You can resort to family donations, for example, unlock the profit sharing of your company. Another possibility: use the loans constituting personal contribution like the Housing Action Loan (formerly 1% housing), home savings. 

Consult other banks to borrow

Did a financial institution refuse the loan? It does not mean that another bank will not accept it. It will be challenging to resubmit the file to the same bank, but other banks will take it. The conditions for granting credits vary from one institution to another. Some are more aggressive commercially and are more flexible. Others offer innovative formulas that increase real estates purchasing power, such as mixed loans and tiered loans.

If for some of the reasons chipped in above, your loan application does not get approved, you should rebuild it. For a loan application to be accepted, the banks ask for the last three statements of account. They must show that the borrower is reasonable and can repay. It's better to clean them to present a reassuring profile to the lending institution.

The opening of a savings account can be the right choice: it allows you to show that you can save money. Do not go at the last moment. Banks will appreciate your long-term savings efforts.

Remember to heal your reputation online: the profile you present on the networks can always serve as your service. With the above tips, you are sure to get yourself the required loan you need next time you apply.

About the Author
Author

Harold & Kim Hanmer

Hi, we're Harold and Kim Hanmer and we'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a team of real estate professionals by your side. We'd be honored to put our real estate experience to work for you.

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