If you’ve filed for bankruptcy or entered into a consumer proposal, you may assume that getting a mortgage is years away.
While a recent bankruptcy or consumer proposal can make qualifying with a traditional bank more difficult, there are mortgage options outside the traditional lending system. As a mortgage broker, we can help you understand where you stand, which lenders may consider your situation, and what steps can improve your chances of approval.
Can You Get a Mortgage After a Consumer Proposal?
Yes. The timing and type of mortgage you qualify for will depend on factors such as:
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Whether your consumer proposal is still active or has been completed
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How long it has been since your discharge
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Your current credit history
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Your income and employment
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Your down payment or available home equity
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Your existing debts
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The reason for the financial difficulty
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The lender's individual guidelines
A consumer proposal is a formal process administered through a Licensed Insolvency Trustee. Once the terms have been fulfilled, you receive a certificate of full performance.
The important thing to remember is that one lender's "no" does not necessarily mean every lender will say no.
What About Getting a Mortgage Just After a Consumer Proposal?
This is where working with a mortgage broker can make a significant difference.
Many traditional lenders want to see a period of re-established credit after a consumer proposal has been completed. A commonly used benchmark in the prime lending market is approximately two years after discharge, along with evidence that credit has been rebuilt responsibly. However, lender requirements vary. We may be able to get you approved for a mortgage sooner than that.
We work with alternative lenders that have more flexible guidelines.
Depending on your overall financial picture, some alternative or B-lenders may consider a mortgage much sooner after a proposal has been completed. In certain circumstances, financing may even be possible while a proposal is still active, although this can involve different qualification requirements, rates, fees and equity requirements.
That means you don't necessarily have to wait years before speaking to someone about your mortgage options.
What If You've Filed for Bankruptcy?
Bankruptcy does not permanently prevent you from getting a mortgage. In fact, depending on your circumstances, you may be able to secure mortgage financing soon after being discharged.
Lenders will consider factors such as your discharge status, credit history, income, down payment, and overall financial situation. While traditional banks may have longer waiting periods and stricter requirements, alternative lenders can provide mortgage solutions much sooner for borrowers who don't yet meet traditional bank guidelines.
That’s where a mortgage broker can help. We work with a wide range of lenders and can help identify financing options based on your current situation—even if your bankruptcy was recent.
The key is finding the right lender for where you are today, rather than assuming you need to wait years before you can qualify.
Why Work With a Mortgage Broker?
When you apply directly to a bank, you can be denied if you don’t meet that institution’s specific qualifying rules and lending criteria.
A mortgage broker can look at your situation closely and help match your application with lenders with more flexible qualifying guidelines to get you approved.
At Brevity Capital, we can help you:
1. Understand Your Options
We'll review your current financial situation, including your credit, income, debts, down payment and the status of your bankruptcy or consumer proposal.
2. Explore More Than One Lender
Different lenders have different qualification criteria. If a traditional bank isn't an option yet, there may be alternative lending solutions worth exploring.
3. Find a Path Forward
Rather than simply telling you to "wait two years," we can help determine what may be possible now and what you can do to strengthen your application for the future.
4. Help You Rebuild Toward Better Financing
If you qualify for an alternative mortgage today, the goal doesn't have to be to stay there permanently. As your credit improves and your financial situation becomes stronger, you may have opportunities to move toward more traditional mortgage financing.
Your Credit History Isn't the Whole Story
A bankruptcy or consumer proposal is an important part of your mortgage application, but it isn't the only factor lenders consider. Your current financial behaviour matters too.
Making payments on time, maintaining stable income, reducing debt, rebuilding credit and saving for a down payment can all help demonstrate that your financial circumstances have changed.
The Government of Canada also notes that access to credit after a consumer proposal depends on demonstrating financial maturity and the ability to repay - not simply on the fact that you previously filed a proposal.
Don't Assume You Have to Wait
If you've recently completed a consumer proposal, been discharged from bankruptcy, or you're still dealing with the process, we can help you.
Your options will depend on your individual circumstances and the lender.
We can help you understand what you may qualify for today, what lenders are available, and what steps can put you in a stronger position for tomorrow.
Ready to Explore Your Mortgage Options?
Bankruptcy or a consumer proposal doesn't have to be the end of your homeownership plans.
At Brevity Capital, we work with borrowers in unique financial situations and help explore mortgage solutions beyond the traditional banks.
Let's look at your options and find a path forward. Call (905) 814-4455 or email [email protected].
Disclaimer: Mortgage qualification, rates and lender requirements vary by lender and individual circumstances. This information is for general educational purposes and is not a guarantee of mortgage approval. A Licensed Insolvency Trustee should be consulted for advice regarding bankruptcy or a consumer proposal.
