Many Canadians who have been turned down by a bank or who are afraid to apply for a mortgage because they are certain they will be rejected may be eligible for the financing they need to buy a home if they ask a different lender. However, rising interest rates may be their enemy. David Dodge, Governor of the Bank of Canada, and the Bank's semi-annual Monetary Policy Report both made it clear recently that because Canada is in better economic shape than expected, interest rates will be on the rise to head off inflation. The Bank projects that the Canadian economy will grow between 3 1/2 and 4 1/2 per cent at annualized rates in the first half of 2002, and will continue to expand until it is at full capacity in the second half of 2003.

Since January 2001, the Bank lowered interest rates by 375 basis points to bolster business and consumer confidence. Now the Bank plans to "to reduce the substantial amount of monetary stimulus in the economy." It began by raising the overnight interest rate by 25 basis points to 2.25 per cent on 16 April. The Bank expects to continue raising rates "in a timely and measured manner."

As interest rates go up, the amount of mortgage you may qualify for goes down. It also means that borrowing the same amount of money gets more expensive. If you'd like to buy a home, why not talk to a mortgage expert before rising rates put financing out of reach.

Canadian banks, because they can afford to pick and choose customers, prefer to deal with those who have good credit ratings and stable employment histories. If you have had a few credit disasters or declared bankruptcy, there are other mortgage lenders who will be pleased to help you.

Self-employed people are looked on with similar disfavour by traditional lenders. You may be required to provide 3 or 4 years of income tax returns showing consistent earnings before you'll even be approved for a car loan, never mind a mortgage. Once again, there are mortgage lenders who appreciate your credit capacity. What makes you a less than attractive mortgage applicant?

Published: April 30, 2002

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Futurist and Strategist PJ Wade is "The Catalyst" -- intent on "Challenging The Best Become Even Better." PJ earned this title by translating the dynamic impact of Boomers and their multi-generation families into relevant insights that start people thinking and taking action—in business and in life. Author of 7 books and more than 1600 published articles, PJ encourages individuals to become their own futurist. PJ writes and speaks about the insight, knowledge and solid decision-making skills that professionals and their clients need to live and work in this vortex of change. For instance, since PJ knows that home is headquarters for the new decades-long "unretirement," she wrote the popular book "Reverse Mortgages: Best Friend, Worst Enemy... Your Choice! (CatapultPublishing.com), which is filled with suggestions and insight on protecting and using home equity. Her new business book, "What's Your Point?," which identifies 7 common mistakes professionals unknowingly repeat to their detriment, will be published in 2009. As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors -- and the clients they serve. A frequently-quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking -- a talent she regularly demonstrates in this column. For more on blogs, books and topics, visit TheCatalyst.com.