Posted: 1 May '19

How is Your Mortgage Renewal Affected After a Consumer Proposal?

Filing a consumer proposal can be a scary time.A consumer proposal is seen similarly to bankruptcy in the eyes of the banks, however it is much easier to turn your credit around after a consumer proposal is paid off. If your mortgage is up for renewal while you are still in consumer proposal, or you have only recently paid it off, don’t stress there are still options for you. Here are some tips on getting approved for a mortgage renewal after a consumer proposal.

  • If you are still in the proposal your current bank may not renew your mortgage. If you are near the end of your payment contract, you may be able to use alternative types of credit to pay off the consumer proposal. If you do that and your bank still won’t renew for you, give a mortgage broker a call.
  • The mortgage companies that will lend to you during or after a consumer proposal will require equity in your home. If you have at least 20% equity in your home, an experienced mortgage broker may be able to help.
  • If you have paid off your consumer proposal, it is important to send your discharge papers to the credit reporting agencies such as Equifax. When credit bureaus forget to remove this mark from your credit report, it will unnecessarily hurt your credit score until it is removed.
  • Different banks have different policies on how they handle consumer proposals. An experienced mortgage broker will know which banks will give you a mortgage renewal after consumer proposal.
  • If you have an upcoming mortgage renewal after a consumer proposal, you will want to be prepared. You may want to make sure that you have built up some amount of savings, because if your bank won’t renew for you and you don’t have enough equity, there may be a shortfall you have to cover.
  • Start rebuilding your credit as soon as you can. You can start doing this with a secured credit card. Put your grocery money on a secured card and start using that to make regular purchases with and reload it every week, month, or however you choose. This will help you to begin getting your credit back on track. Mortgage lenders like to see activity like this on reports when people appear to have struggled recently.
  • Last, keep in mind that the more rural your place of living is, the harder it may be to obtain a mortgage renewal after a consumer proposal from a mortgage lender. This occurs because in the eyes of the lenders rural markets are smaller and it would take them longer to sell the home if they had to foreclose on the property.

Agreeing on and paying off a consumer proposal does not mean that your financial existence is over. Take some of the simple steps above and apply them. Rebuild your credit, use alternative credit, make your payments on time, and never give up - you will get the credit that you deserve.

Contact us today for help with your mortgage renewal after a consumer proposal!

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