Now that the fallout of the covid 19 virus is upon us, many mortgage companies are changing the way that they do business. There are a few reasons that mortgages were being refinanced, and that was to lower the monthly payment, or extend the term of the loan, or to take money out in equity on the home. There are three main reasons why it is harder to get your mortgage refinanced and one of them is that there is tougher scrutiny on applicants now than there was before.
- Remortgaging is more difficult for Canadians because lenders are much more strict when it comes to an applicant’s employment and income level.
- Due to the coronavirus, we are seeing many valuations come in at a way lower rate than previously expected which will harm appraisals and overall value.
- When it comes to refinancing, most lenders simply want to give loans to the people who don’t actually need the loan, and that’s a shame.
“Refinances are another matter though. They are uninsurable, so the lending risk sits squarely with the lenders; whereas purchase transactions facilitate changes of ownership, and the associated mortgages are a necessary and essential part of that process. Mortgage refinances are arguably a non-essential process.”