Getting A Mortgage After A Consumer ProposalPosted on: July 21, 2017
People often wonder about their chances of getting a mortgage after a consumer proposal in Ontario. In the video above, Richard Killen, a Licensed Insolvency Trustee in bankruptcy in Toronto talks about “Would Services of a Trustee Prevent Me From Getting a Mortgage after a consumer proposal”.
One of the big ambitions of most people, especially for the family is to ultimately buy a house. People who have debt problems come to see a Trustee and end up do a bankruptcy or perhaps a consumer proposal, are going to be concerned whether this bankruptcy or consumer proposal is going to somehow prevent them from being able to obtain a mortgage at a later date.
The only way that we can really answer this is, nobody can really predict the future, there is a lot of factors that go into why a person can get a mortgage, and why they cannot. Bankruptcy and proposals on your record are just one factor, and also time. The bottom line is, it is impossible to really predict it, but generally speaking, after you have done a bankruptcy or proposal, and have solved all your credit problems, and some time has gone on, most people can and have the other ingredients properly arranged, they can get the mortgage.
An interesting aspect of it though is the mortgage renewal, people are highly concerned that they may lose their house when the renewal time comes. And what we found, I’m not an expert on this practice, but what we found is that renewals, I guess they are automatic, generally they are almost computer generated, and so very few people have this kind of problem renewing their mortgage.
What is a consumer proposal?
It is an option for debt relief which enables you to pay a portion of your debt by developing a “proposal”. You can also extend your payment term for up to five years or less. Once the creditors agree to the settlement, you can make your payments through your Licensed Insolvency Trustee. How will you know that this is the right solution to get out of your debt problem? You can have a thorough discussion with your trustee about your financial situation. Moreover, before making a decision, each of the options and alternatives will be explained to you. Upon making the decision, your licensed insolvency trustee will administer the proposal.
Consumer Proposal Mortgage Vs Bankruptcy
As opposed to bankruptcy, consumer proposals enable debtors to keep their assets such as a home. As long as you are keeping up with the payment and you are showing that you have become financially responsible, you can continue or renew your mortgage, even though a proposal will affect your credit score. In most instances, you can continue your mortgage with your current lender or bank. However, this might not be the case if you choose to switch lenders because your credit score will be taken into consideration.
Getting A Mortgage after Consumer Proposal In Ontario
Getting a mortgage after a consumer proposal is also possible if you have a stable income and you can provide a certain percentage of down payments.
This particular debt relief option enables you to save up because of the lowered monthly payment terms. Moreover, you will be advised by your Licensed Insolvency Trustee on how to manage your finances better and guide you on how to develop an effective budget plan. Always remember to fulfill your end of the proposal by avoiding late payments and paying the required amount every month as this will reflect on your credit record. In this case, your credit score will improve over time after filing the consumer proposal. Going through this will be difficult and needs an extra amount of time and effort but it will all be worth it in the end. After the consumer proposal, you will become eligible for a new mortgage or to purchase the home that you and your family have always been dreaming about.
The process will become easier and less stressful if you seek the services of a well-experienced Licensed Insolvency Trustee. By scheduling a free consultation, you will have a better understanding of getting a mortgage after a consumer proposal in Ontario.
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