Over the last few weeks I’ve had a few (pleasant) surprises with files I’ve been working on.
When I take new applications from clients, I ask for all their documents upfront. Before I send them out shopping, I thoroughly review everything to be certain I will be able to get them an approval that they will be happy with.
If I know I can’t get their ideal approval, I will offer options that I see based on their particular situation.
If they are asking for a purchase price that is higher than what I see they qualify for, I let them know and suggest ways that we can potentially increase their borrowing power.
Sometimes, if I can see that there is no way I can get an approval at this time, I let them know. If I know where they can get an approval I will refer them to someone that I think might be able to help.
For example, for mobile homes in parks, I will send people to one of the local credit unions or a chartered bank.
About three weeks ago, I started working with a young couple. They are in northern B.C., so the price points are a little different.
Based on their income and loan payments, I was comfortable with them shopping at the $200,000 price point. They had a house in mind and it was priced at $210,000.
They said that they had been to one of the chartered banks and that the lender there told them he could absolutely get them to the $210,000 price point.
They moved forward with an offer, and paid for a home inspection, water test, and had someone out to inspect the septic system.
On the day of subject removal, their banker came back and said that he couldn’t actually get their file approved.
I hate when this happens. This is why I am so particular upfront.
They came back to me to see if there was anything we could do.
I did some research and found a lender that would go to their area and ended up placing them with a lender that had a cash-back program. By using the cash-back mortgage, we were able to access enough money that they could pay off one of their loans so that the ratios were in line.
I am not keen on the cash-back programs for a few reasons, but every once in a while they are the fit that clients need to be able to buy a home.
Another northern client wrote an offer on a home that was straddling three different parcels of land.
The first two lenders I approached wanted to support the client’s application, but required a new survey and a second appraisal as the purchase was a private sale (versus a property listed on MLS).
The fifth lender was fine with the property and we had an approval at a great rate.
Sometimes, when one lender says no, another may be open to approving your application.
If you are struggling to get your financing in order a second set of eyes might be very helpful. If you have applied at your usual chartered bank and are told no, it may be worth exploring your options.
There are many great mortgage professionals out there who may be able to find a great solution for you.