1. Mortgagegirl.ca
Presents
YOUR MORTGAGE HAS BEEN DECLINED!
NOW WHAT?
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
2. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
ALTERNATIVE LENDING 101
If you’re thinking of getting a mortgage, if you are like most of us, you’ve likely done
some research to see what’s required in order to be approved. But what happens if
you don’t meet ALL the requirements?
Welcome to the world of alternative lending.
These mortgage offerings are geared towards a borrower who needs a lender to work
with them in a common sense way that meets both the borrower’s needs and the
alternative lenders rules and guidelines. Don’t be discouraged by a decline, keep
reading for details on other options available.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
3. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
EVERYONE IS A BIT ALTERNATIVE
There are multiple avenues you can take to get a mortgage approval and it’s important
to pick the one that’s right for you.
You can go directly to your bank branch where you have been doing business for many
years, meet with one of the bank’s mortgage specialists or go through an independent
mortgage broker. It’s likely all of these channels offer some kind of alternative if you
have been declined and if they don’t offer, be sure to ask for a referral.
Before you accept a “no” for an answer, make sure you have explored all of your
mortgage options. This may be the time to seek out a mortgage professional who has
not only experience in alternative lending but has the connections too.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
4. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
ALTERNATIVE LENDING IS DIFFERENT THAN PRIVATE LENDING
Private lenders are usually one individual or a group of individuals that have pooled
their funds together for the purpose of mortgage lending. Alternative lenders tend to be
larger corporations with multiple mortgage funding channels, including some banks too.
My suggestion is if you find yourself having to go with a private lender, do be sure you
are with a reputable private lender as there are fewer government bodies monitoring
the actions and practices of the private lenders than the prime and alternative lenders.
If you have questions about mortgage financing of any type, I always recommend
contacting a mortgage professional experienced with this type of financing.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
5. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
ALTERNATIVE LENDERS MAKE MORE EXCEPTIONS
This is one of their most attractive features; it’s basically the point of going through an
alternative lender.
Prime lenders have a box they like the borrower to fit in for them to qualify you for a
mortgage. This is where alternative lenders differ from their prime counterparts.
Whether it’s bruised credit, limited income history or a unique downpayment source,
alternative lending is available for the out-of-the box borrower.
In exchange for relaxed requirements don’t be surprised if you’re charged a higher
interest rate and a fee which may be added to the mortgage, both of which will be
quite reasonably priced.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
6. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
PAYOUT PENALTIES DIFFER WITH ALTERNATIVE LENDERS
Most lending commitments feature 2 payout penalty calculation options, 3 months
simple interest based on your outstanding mortgage balance or the interest rate
differential, whichever is the greater.
Interest rate differential or IRD as it is commonly known as is calculated on your
outstanding mortgage balance, time left in your term as well as the difference between
your existing rate and the best rate available at the time you break your term.
Where alternative lenders differ is a mortgage through them may include additional
fees should you choose to end your term prematurely. Avoid any surprises by fully
understanding the potential payout penalties that may come with your alternative
mortgage.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
7. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
PROPERTY IS REALLY IMPORTANT TO ALTERNATIVE LENDERS
When it comes to alternative lending, the collateral for the mortgage is one of the
most important components of whether you do or don’t qualify. The collateral in this
case being the subject property and land.
Given these lenders are making exceptions in the requirements for the borrowers, they
tend to be more reliant on the strength of the property. The property has to be in
prime condition and located in a marketable city centre, or at least very close to one.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
8. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
ALTERNATIVE LENDERS ASK FOR LESS DOCUMENTATION
An alternative lender will work with you on document requirements such as
employment and down payment confirmation while at the same time meeting their rules
and guidelines.
You will still be expected to show you can make the mortgage payments and can also
document where your downpayment came from so it conforms to Canadian money
laundering guidelines.
Your favourite mortgage professional should be able to advise you of what
documentation is required for each of the different lenders.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca
9. YOUR
MORTGAGE
GOT
DECLINED!
NOW
WHAT?
If you’ve been declined for a mortgage, DON’T WORRY. An
experienced mortgage professional can help make the process
pain-free by ensuring you’re educated about your alternative
options and confident with your final decisions.
They can also help you strategize an effective exit plan to get
you back to best rates if you choose to take an alternative
financing route as a short-term mortgage solution.
Jackie
Woodward
//
TMG
//
Mortgage
Broker
//
780.433.8412
//
info@mortgagegirl.ca