When it’s time to look for a loan (a car loan, a mortgage or a personal loan), the first thing people do is go to their local bank. It usually offers good customer service and you tend to get what you are looking for. However, what do you do if your bank refuses your loan application?
What other options do you have?
Canada is home to different lenders, not just banks. You can get financing from financial institutions that are different from major banks in Canada. The lenders that are available to you are co-ops, trust companies, caisses populaires, and so on. If your loan has been rejected by one of the big 5 banks, you can always try your luck with financial institutions belonging to a different category.
One option that is often overlooked is obtaining financing from a private lender. Private lenders enter business faster in general and have more flexible application requirements than larger financial institutions. If your credit rating is a problem, private lenders are often the solution.
Private lenders only want the right loan-to-value ratio, which means that acceptance for a loan is much easier. Many of them are not even interested in your credit history or income / debt ratio.
Mortgage Brokers: Linking Together
You have a better chance of getting the loan you want if you try your luck with a mortgage broker or with a loan specialist. A mortgage broker can review your situation, and based on his experience, he or she will know which product will suit you the most. In addition, brokers have access to promotions that other lending institutions and banks do not want you to know: these promotions are a reward for large brokerage firms that bring a lot of customers to these institutions. They will also be aware of other products for which you could qualify.
If you have not been refused by a bank, but have been offered a high interest rate for a mortgage, you can tap the volume of the mortgage broker in your favor. Mortgage brokers often receive discounted rates in exchange for their corporate ledgers.
You should take advantage of a broker’s know-how to increase your chances of being approved in your application for financing.