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Why lenders may refuse your mortgage application?

Tuesday, October 10, 2017 Written by Emmanuelle in General

The price of the home you have just bought is not its market value

Banks want to make sure the purchase price of the home you have agreed upon is its true value. It has been one of the biggest reasons why some closings didn’t happen this summer. As a seller you also have to think about it, you want to sell and also close the transaction.

Not enough credit history

This applies if you are new to the country, or you are just starting your life. Lenders want to know your paying habits, in other words if  your debts on the due date

Low or bad credit score

Recently started new job

If you recently started a new job, lenders will wait at least until your probation period is over. Sometimes this can be six months or more. If you have a stable job and have been working at your current job for some time, lenders will look at you as a good candidate for a mortgage.

Too much loan debt

Not enough for a down payment

Self-employed people

Lenders will request at least the last two years of your income tax returns and notices of assessment.

Too many properties

All banks have limits of how many mortgages they can grant to the same person.

Unforeseen events in your life

Life is very unpredictable. Unforeseen events such as health issues, job loss or a divorce will increase the chances that your mortgage application will be turned down.  

Source : Board of Canada & REM Sept 27, 2017