Mortgage lenders have a dread of two major items.
Once you know what mortgage lenders don’t want to face, you will better understand whether or not your application will be viewed favorably by the mortgage lenders you apply to - taux hypothecaire.
A lender has two big fears:
Losing Money
The lending institution does not want to lose any of its capital that he has lent, nor the interest he is supposed to receive - taux hypothecaire. It happens (too often from the lender’s point of view) that people do stop making their home loan payments.
When this happens, the lender has even more losses because he has to cover the fees of a lawyer to initiate the proper steps for the foreclosure of the home.
After that, he has to be concerned that the bank will be able to sell the home for enough to recover their costs of principal (taux hypothecaire), lost interest and lawyer’s fees.
Losing Time
For a mortgage lender, the steps to repossess a property is a loss of his time. He obviously prefers to lend the money and collect the payments. To work with lawyers, follow all the necessary legal steps and take care of the house before it is sold and to sell the property are not activities that he wants to be involved in.
He is just losing his time!
Even if the mortgage lender does not lose money (taux hypothecaire), because the mortgage is insured by the CMHC or another insurer, he will take all the required steps to make sure each loan is a good loan, with the least possible chance that he will have to foreclose on the property.
A lot of people wonder why a bank even worries about the credit risk of the borrower when they hold the home as collateral.
The answer is simple. Banks don’t want to own your home; they just want to collect your mortgage payments - taux hypothecaire.
