Home Buying and Consumer Proposals
Consumer proposals are a way for those with bad credit to rebuild their financial standing without declaring bankruptcy. As mortgage brokers in Edmonton who handle difficult credit situations, we're often asked if an individual can qualify for a mortgage after a consumer proposal. The short answer is yes, but most lenders will treat your situation as if you had declared bankruptcy.
How Home Buying after Bankruptcy or Consumer Proposal are Similar
Whether you have declared bankruptcy or have entered a consumer proposal, there are conditions that must be met before you are considered eligible for credit. In a bankruptcy, it's typically two years after your discharge before creditors will consider you for loans or credit cards. For a consumer proposal, it's usually two years after you have paid your commitment in full. For example, if it takes you five years to pay off your consumer proposal, you are looking at a total of seven years before you start over. To qualify for a traditional mortgage with five percent down after a consumer proposal, you must meet the following conditions:
- You must meet the two-year wait after your proposal is paid in full.
- You must have two credit sources that have been established for a minimum of two years.
- You cannot have any late payments or debt collections after your proposal.
Adding up the years before you can qualify for a traditional mortgage can be very disheartening. However, there is hope in the form of an Edmonton mortgage broker who has access to alternative lenders.
Qualify for Home Buying after Bankruptcy or Consumer Proposal
At Dominion Lending Centres in Edmonton, we help people who have entered consumer proposals realize their home ownership dreams every day. Here are two different scenarios that you can consider:
- If your proposal is paid in full, you can qualify for a mortgage with us with a 15-percent down payment.
- If you are currently paying your proposal, you can get a mortgage with us with a down payment that's closer to the 25-percent range.
We know that it can be difficult to come up with enough money for a hefty down payment when you are in or freshly out of a consumer proposal, but if it's possible. Each situation is unique and if you go through our pre-approval process, we can work with you to help you realize your dream of owning a home.
Contact your mortgage mentors at Dominion Lending Centres in Edmonton to learn more about qualifying for a home after bankruptcy or consumer proposal. We just might surprise you with how easy it can be to buy your home and rebuild your financial future.
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