Many people believe that after declaring bankruptcy, obtaining a mortgage is an impossible feat.
“Filing for bankruptcy or a consumer proposal isn’t a financial life sentence. There are a number of mortgage financing options available to those who have declared bankruptcy in the past.”Barb Pinsent – Mortgage By Barb
Here are some tips to help you get a mortgage after bankruptcy:
BUILD YOUR DOWN PAYMENT
Your credit rating may be dismal, but a large down payment may be enough to convince a lender you’re worth the investment. Now that some of your debt-load (and interest payments) have likely been lifted, use the extra income to save your cash and improve your financial position.
“The bigger the downpayment the better, in this case” says Barb.
Here are some tips on how to save your downpayment faster
PAY ON TIME, ALL THE TIME
NEVER miss a payment again!
After filing for bankruptcy or a consumer proposal, your ability to manage credit will be placed under a microscope. The best way to recover is to be the perfect borrower. Make your minimum payments on all bills and keep outstanding balances on cards and lines of credit to a minimum. Not doing so will be a huge red flag for lenders.
IMPROVE YOUR CREDIT SCORE
A mortgage is a big investment for a lender, but there are smaller steps you can take to improve your credit score ahead of time. Take out an RRSP loan, apply for a secured (pre-paid) credit card, or apply for a car loan.
“Your credit rating plays a huge role in a lender’s decision to give you a mortgage,” advises Barb, “Focus on establishing a good track record post-bankruptcy.”
Need more tips on improving your credit score? Check out my blog
WAIT IT OUT (BUT NOT THAT LONG)
You may not have to wait for your bankruptcy to disappear from your record to secure a mortgage. Most prime lenders (the ones with access to those low interest rates) will consider your mortgage application two years after your bankruptcy discharge. At this time, you’ll also need to prove you’ve re-established credit and kept yourself in good standing.
Mortgage financing options can be mind-boggling at the best of times, even more so following a bankruptcy. Relieve yourself of some of the stress by contacting Barb on 780-370-1490 to understand your financing options and create a clear path to your dream home.