The Myplace Playbook // 067
Hey Everyone,
When I asked you to finish the sentence a few weeks back, most of the replies I got were about fear of the future.
Rates. Savings. Job security. Timing.
But a handful of replies were about something that happened in the past.
A few of you, in different ways, said some version of this:
"I tried before. It didn't work out."
And then nothing. No follow-up. No plan. Just a door that felt like it closed and stayed closed.
I want to talk about that today. Because a declined mortgage application is one of the most misunderstood things in this whole process. People treat it like a final answer. It almost never is.
First, the most important thing I can tell you.
A decline from one lender is not a decline from all lenders.
If you went to your bank, your personal bank, the one where your paycheque lands and your savings sit, and they said no, that is one opinion from one institution with one set of criteria. There are dozens of lenders in Canada. They do not all look at your file the same way. They do not all weigh the same factors. They do not all serve the same borrower.
A broker's entire job is knowing which lender is the right fit for which file. A bank's job is selling you their product. Those are not the same thing.
I am not saying this to pitch you. I'm saying it because a lot of people who were declined at their bank concluded the answer was no everywhere, and it wasn't.
Now let's talk about why declines actually happen.
Because most people who got a no were never told the real reason in plain language. And if you don't know why it happened, you can't fix it.
Your credit score was too low.
This is the most common reason, and the most fixable one over time. Most insured lenders want to see a score of 680 or higher. Some will work with 620. There are alternative lenders who go lower, though the terms look different.
The key word is "was." Credit scores move. A score that declined you 18 months ago may not be the score you have today. If you've been paying down balances, cleaning up collections, or simply letting time do its work, the number may have shifted more than you realize. It costs nothing to check.
Your debt load was too high.
Lenders look at something called your Total Debt Service ratio, essentially, what percentage of your gross income goes toward debt payments including the mortgage. If that number was too high, the math didn't work at the payment level you were applying for.
This one is also more fixable than it sounds. Pay down a car loan or a line of credit and the ratio changes. Apply for a less expensive property and the ratio changes. Come in with a larger down payment and the ratio changes. The no wasn't necessarily about you, it was about a specific combination of numbers on a specific day.
Your income didn't qualify the way you presented it.
This one catches a lot of people off guard, especially if they're self-employed, commission-based, or recently changed jobs.
Lenders don't always use your income the way you think of your income. A base salary is straightforward. But bonuses, overtime, rental income, self-employment income, contract income, these all get treated differently depending on the lender and how the file is documented. What you earn and what a lender will use to qualify you aren't always the same number. Knowing the difference, and knowing which lender treats which income type most favourably, is most of the job.
You were in your probationary period.
Some lenders won't approve a mortgage if you've been at your current job for less than three months. If your application landed during that window, the timing was the problem, not you, not your income, not your history. Past your probation, the file looks completely different.
The property itself was the issue.
This one surprises people. Sometimes the borrower qualifies just fine but the property doesn't. Rural properties, certain condo buildings, homes with secondary suites, properties with acreage, places that need significant work, lenders have opinions about all of these.
A no on one property is not a no on the next one.
You applied with the wrong lender for your situation.
Some lenders are built for straightforward files. Salaried employee, strong credit, conventional property. If your file has any complexity, self-employment, bruised credit, non-traditional income, a property that doesn't fit a neat box, those lenders will decline you, not because you don't qualify anywhere, but because you don't qualify there. The answer isn't to give up. It's to go somewhere that was built for files like yours.
Here's what I want you to actually take from this.
A decline is information. It's not a life sentence.
It tells you something specific didn't work on a specific day with a specific lender. That's useful. That's something to build from.
The people who treat a decline as a final answer are the ones who stop asking questions.
And the frustrating thing, from where I sit, is that a lot of them were closer than they thought.
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A different lender.
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A few months of credit improvement.
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One debt paid off.
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A better-documented income file.
The difference between declined and approved is smaller than most people imagine. It just requires someone to actually look at what happened and tell you directly what needs to change.
If this is you, here's the play.
Hit reply and tell me what happened. When you applied, roughly what the situation was, and what you were told, even if what you were told wasn't very specific.
I'll tell you what I think actually went wrong and whether anything has likely changed since then.
No cost. No commitment. Just a straight read on where you actually stand today versus the last time someone looked.
Because "I tried before and it didn't work" is not the same as "it won't work now."
Not even close.
-Andrew
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