To this article will give Consumers a cross-section of mortgage problems and the potential solutions.

Sam & Ida own a home now. They want to buy another home nearby for $170,000. They have someone to buy their present house, which will leave them with $60,000 to place as a down payment. They only need $110,000. The problem lies with their incomes. They both work is self-employed individuals. They had an excellent working relationship with their bank until they applied for the mortgage. They were taken aback when the negative answer came after three days. The reason for the turn down was the amount of their reported incomes. The last couple of years, most of their earnings went back into the business. Their own bank was quite strict when it came to their debt service ratios. The solution was the number of lenders we deal with at Mortgage Matters. One of our lenders will treat debt service ratios as secondary if the amount of down payment is 35 percent or more of the purchase price, along with an excellent credit history. Sam & Ida were pleasantly surprised at the approval and the rate of interest on their new mortgage.

Meredith and Hans were forced into bankruptcy some five years ago. They have paid cash for everything ever since. They both have salaried jobs with excellent continuance. They have RRSPs amounting to $40,000 to put as a down payment on the new home they want a buy at $160,000. Even though of their debt service ratios are in line, the developer's lender refused their mortgage request because they have not re-established credit since the bankruptcy. We we're able to get them approved with an Equity Type Lender, albeit at a higher rate and fees. To re-established credit after a bankruptcy is of the utmost importance. How you re-establish credit was the subject of a previous article.

Jane, a single mom, has been renting for 12 years, since her divorce. She is paying $1200 per month, plus the utilities. She is also paying off her car at $460 per month. She is expecting a large long sum from the government "pay equity plan", which she plans to put down on house. Her salary of $39,000 will qualify her under existing debt service ratios for a house of $140,000 [with $35,000 down] but her car payment will put her over the limit for Total Debt Service Ratio [she is allowed a total payment to salary ratio of 40 percent and she scores 46 percent]. Her present lender wants her to either payoff the car or refinance the car over a longer term, to allow her to qualify. She does not want to pay off her car, because it would take away from the down payment, which means she would now be in a high ratio situation necessitating CMHC surcharges. She does not want to refinance the car because she has already paid a good portion of the interest. Refinancing would start the interest all over again. Her bank insists that she do one or the other. We were able to convince another bank that should she get in trouble, she would be approved for a longer term on the car, but as long as the house and the car payments are current, this lender will allow the mortgage, even with the 46 percent debt service ratio.

These instances are all real, giving you examples of flexibility within the lending community. If your idea makes sense, chances are you can be approved even if the conventional thought is negative.