Posted: 1 Feb '19

Mortgage Renewals after Consumer Proposals: How Will Your Renewal Be Affected?

If you've undergone a consumer proposal, you'll need to satisfy several conditions in order to begin rebuilding your credit and qualify for a new mortgage. Fortunately, obtaining mortgage renewals after consumer proposals isn't as difficult as it may seem. Here are three ways your mortgage renewal may be affected by your proposal, and what you can do to improve your chances of approval.

Two-Year Transitional Period

Once your consumer proposal has been paid off, or discharged, you'll need to wait two years before prime lenders will consider you eligible for obtaining credit cards loans. This means that if it takes you four years to pay off your debt, you'll need to wait a total of six years before starting to repair your credit score. You can shorten this transitional period by paying off your proposal as quickly as possible.

Higher Interest Rates

Mortgage renewals after consumer proposals are considered high-risk and therefore may be charged an extremely high interest rate. Homeowners can improve their chances of obtaining favourable interest rates on by continuing to make their current mortgage payments regularly and on time. Homeowners who have late or missing payments may be denied mortgage renewals after consumer proposals.

Damaged Credit History

Mortgage renewals after consumer proposals typically don't require a new credit application, as long as you're staying with your current lender. If you want to switch lenders, however, you may find it difficult to obtain a new home loan due to your damaged credit history. This is where working with a mortgage broker comes in. Mortgage brokers have access to alternative lenders, such as credit unions and trust companies, that work exclusively with borrowers seeking mortgage renewals after consumer proposals. Working with a mortgage broker also protects your credit score by reducing the number of inquiries on your credit report. Your broker will only need to access your file once in order to shop around for mortgage renewals after consumer proposals.

If you're a homeowner who has recently undergone a consumer proposal, we can help you review your mortgage refinancing options. Contact us for more information about mortgage renewals after consumer proposals.

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