Here’s what lenders want to see after you’ve been in a consumer proposal.

Recently I’ve had a couple of different folks who wanted to get mortgages and get pre-approved, but they’ve had consumer proposals. Some had them recently discharged or they were still in the consumer proposal. Most traditional lenders (like banks) want to see you discharged at least two years from that consumer proposal.

They basically treat the consumer proposal like a bankruptcy. So in order to prove that you can handle credit they want to see a two-year track record on two different loans—so that can be a credit card line of credit car loan whatever any combination of those that report to the credit bureau. You’ve got to make your payments perfectly for two years and once you’ve done that then they’ll reconsider lending you money.

There’s a different approach if you have a big down payment. With the first category you can potentially buy a house with as little as 5% down. The only other way to move forward before that two years is up is if you deal with an alternative lender and there you can be discharged for a day as long as you’ve got at least the 20% for the down payment plus a 1% lender fee.

Of course, you’re going to have a higher interest rate, but it is a way of moving forward. I’m not an expert when it comes to bankruptcies and consumer proposals and which way a person should go, but I can refer you to experts if you have questions about that! But in terms of moving forward and buying after a consumer proposal or bankruptcy, I’m your guy. If you have questions on that um give me a call!

I also have a helpful video about why you should get a second opinion before renewing your mortgage.

About Jason Scott, Edmonton Mortgage Broker

Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker Edmonton.