Getting a Mortgage Post-Bankruptcy
Looking to purchase a home after being discharged from bankruptcy or clearing a consumer proposal? Have you been turned away by the big banks and other traditional lenders because you don’t fit their guidelines? You’re not alone — and we’re here to help.
Many Canadians struggle to get approved for a mortgage after bankruptcy, due to bruised credit ratings. Most people don’t realize that a variety of mortgage options exist through Alt-A and B lenders, providing a competitive and flexible alternative to mainstream financing.
At Main Street Mortgage, our team helps homeowners, who have gone through a personal bankruptcy or a consumer proposal, secure a mortgage. We understand that your credit score doesn’t always fairly reflect you.
Find out how we can help with a mortgage post-bankruptcy.
Dealing with Debt, Bankruptcy, & Mortgages
At Main Street Mortgage, all of our team members are mortgage experts with an in-depth understanding of the various programs available to individuals who are either facing a personal bankruptcy or recently discharged from bankruptcy.
A consumer proposal is an alternative way to deal with your debt that allows you to avoid declaring bankruptcy in Canada. To file a consumer proposal, you have to make a formal offer to your creditors to pay back your outstanding debt at a predetermined monthly amount over a specific time period.
In order for your creditors to accept your consumer proposal, you must offer more than they would receive if you simply declared bankruptcy. We recommend connecting with an expert to determine this payment amount in advance.
Once you clear the obligations of your consumer proposal and pay back your debt, your credit score will clear. Overall, a consumer proposal will have less severe impact on your credit ratings than a bankruptcy, which is why we recommend it as your first option.
Mortgages for Discharged Bankrupts
Do you want to buy a home after completing the terms of your bankruptcy? Are you anticipating that you will be discharged from bankruptcy soon?
Certain programs will allow you to apply for a mortgage the day after being discharged, so you do not lose any time in getting your life back on track.
Our specialists can help you create a plan, in advance, that will assist you in securing a mortgage after discharge and rebuilding your credit going forward. Learn more about mortgages for discharged bankrupts in this article.
After bankruptcy, re-establishing your credit should be your biggest priority. If you have recently been discharged from bankruptcy, or cleared a consumer proposal, here are a few quick tips that will help you begin to rebuild your credit:
- Get a new credit card. Be careful to not max out this card or go over the limit. Make every payment on time, and pay in full to improve your credit rating and demonstrate to potential lenders that you can be trusted.
- Secure two types of credit for yourself. Most lenders will want to see at least two forms of credit on your record. These can include two major credit cards (e.g. VISA or MasterCard), a line of credit, or a car loan.
- Keep your credit cards for at least 24 months. Make sure that you are not switching credit cards or getting rid of them immediately. Keep your credit cards for a minimum of 24 months to properly build up your credit.
- Pay your bills on time. A missed cell phone or utilities bill can be a warning sign to lenders. Make sure you are paying all your bills on time or ahead of time.