Emergency Mortgage Loans Explained

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If your mortgage financing is revoked at the last minute by your bank or broker, you may find yourself in need of serious help. Luckily, there are many emergency mortgage loan relief and assistance programs that can be of aid.

How do Emergency Mortgage Loans Work?

Emergency mortgage loans are loans for borrowers who have been denied financing from traditional lenders. Private, non-traditional lenders often offer emergency mortgages that are not subject to typical eligibility requirements such as stress tests. Emergency loans often have much quicker turnaround than typical loans, and lenders are often much more flexible with regards to who they lend to. In some cases, depending on the lender and provided you have all of the required documents handy, a private lender can approve the mortgage within an hour and have it funded the next day.

If you were to re-apply for a more traditional mortgage loan through another institutional lender, the application process could take as long as a few weeks, which may not be ideal for you and your timeline. If your mortgage was denied due to a negative change in your credit score, the process could take even longer— fixing a poor credit score is often a lengthy process.

Why Might You Need an Emergency Mortgage Loan?

There are many reasons why your bank or lender may deny your request for funding at the last minute. Here are some examples of common reasons you may get turned down, even after a pre-approval:

  • A drop in your credit score
  • Loss of stable income or employment
  • An increase in total debt (extra lines of credit, new car lease, added balance on your credit cards, etc.)
  • Suspicious withdrawal or deposit activity
  • Legal issues with the property itself
  • False information on the initial mortgage application

At Clover Mortgage our expert team of mortgage brokers can help you quickly identify any potential risks and problems with your mortgage application before you even begin the approval process. They can also help you plan ahead to ensure that you won’t have any problems as the closing date approaches. If you are still in need of an emergency loan, we can help you get approved with a wide range of alternative lenders to suit your needs.

Types of Emergency Mortgage Loans

In addition to residential emergency mortgage loans, Clover Mortgage also offers commercial emergency mortgage loans. Businesses might use a commercial mortgage loan to purchase multi-unit residential complexes such as condominiums or apartments, office space, industrial properties such as factories or distribution centers, and/or retail properties. Compared to residential mortgages, commercial mortgage loans from banks are more complex to structure, can have higher interest rates, and come with longer approval times. A commercial mortgage with an institutional lender has more factors that can contribute to borrowers getting denied for funding at the last second.

Luckily, Clover Mortgage is specialized in connecting you with quick-close commercial mortgages in a number of cities across Canada, including:

  • Toronto, Mississauga, Oakville, Burlington, Milton, Brampton, and other parts of Ontario such as Ottawa, Hamilton, Barrie, Vaughan, Richmond Hill, Thornhill, Woodbridge, Maple, and more!

We work with over 50 lenders across the GTA and other parts of Ontario and have years of experience in connecting borrowers with the best lenders for their situations. Clover Mortgage can help connect you with the right type of loan and the right kind of lender. We will provide you with a free last-minute emergency mortgage consultation anytime you need it. We will help analyze your financial situation quickly and get you into the best possible mortgage option available to you.

Everything You Need to Know About Eligibility

Even though a traditional mortgage can take weeks to get approved, you can qualify for an emergency residential loan in as little as an hour, and receive your funding in as little as 24 or 48 hours. Unlike the big banks, private mortgage lenders do not have to abide by the federal government’s mortgage stress test rules or restrict their lending based on any debt to income ratios. As a result, private mortgage lenders have greater flexibility in their lending programs.

Clover Mortgage can help connect you with a number of short-term private mortgage programs and help you determine which program is the best option for you.

How to Ease the Application Process

When attempting to qualify for an emergency mortgage loan, there are a few things you can do to ensure the process runs as smoothly as possible:

  • Make sure all the information you provide to your broker or lender is accurate, up-to-date, and reflective of your current financial situation. Hiding information from your broker can end up delaying your approval or having your mortgage application denied.
  • Make sure you prepare and locate all necessary documents ahead of time. Some documents you may need include proof of employment, proof of credit score, income tax filings, business license or articles of incorporation if applicable, appraisal, and more.
  • It may be a good idea to review your credit report before beginning the application process to seek out approval from a lender. This gives you the opportunity to fix your credit score before applying if you have a high chance of getting denied.
  • Avoid any major life changes, where possible, while going through the mortgage application process. You want to present yourself as a stable, risk-free borrower in order to appeal to lenders, and uncertain life conditions can be detrimental to that goal.
  • Make sure you can afford the minimum required down payment on your property. It is always wise to put down at least 20% of the asking price in order to minimize the size of your mortgage loan and make it easier to pay off. If you do not have at least 20%, the you may be able to qualify for a 5% down mortgage. Speak with your mortgage broker about your options.
  • Ensure you are working with a skilled, professional and knowledgeable mortgage broker that can help you achieve all your home financing goals.

Looking to work with a team of experienced brokers to acquire the best home financing plan for you? Contact Clover Mortgage today for a free consultation!

Works Cited

Mortgage, Clover. “Emergency Mortgage: Last Minute Quick Closing Mortgage Help.”
Emergency Mortgage | Last Minute Quick Closing Mortgage Help,
2021, https://clovermortgage.ca/emergency-mortgage/.

Switzer, Jane Switzer. “What Is an Emergency Mortgage, and How Does It Work?”
5 Oct. 2021, https://www.lowestrates.ca/resource-centre/mortgage/emergency-mortgage.

Rushi Parikh
Written By Rushi Parikh
"Empowering your dreams with personalized mortgage solutions tailored to your unique financial needs."