Qualify For A Mortgage After Your Consumer Proposal

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Getting through a Consumer Proposal is no small achievement – insolvency is a humbling experience, but paying down your debts with a Consumer Proposal is a moment you should be proud of. You’ve probably been told that a bankruptcy or a Consumer Proposal gives you a second chance – in only a few years, it will even be off your credit rating. But if you want to take out a major loan after going through a Consumer Proposal, there’s still more to do, but there is a path to rebuilding your credit so that you can qualify for a bank loan, a better car loan, or a mortgage.

Homeownership is one of the biggest financial goals that can be jeopardized by insolvency. It’s a major financial commitment, and banks and mortgage brokers may not be willing to take on too much risk to offer you a mortgage.

A bad credit rating is a red flag for potential new creditors that says you’re a higher risk borrower, because you’ve run into insolvency in the past. The cost of taking on more risk, if you qualify at all, is a higher interest rate. In a city like Toronto where the average home price is still nearly $750,000, you simply can’t afford higher interest rates on your mortgage.

But your credit rating doesn’t have to stay that way forever; you can rebuild and with time, qualify for a mortgage at a better interest rate. Part of the Consumer Proposal process with David Sklar & Associates is going through credit counselling, where we teach you about using credit wisely to re-establish your credit rating and move on from these difficulties. These are some of the things you can do to rebuild your credit and qualify for a better mortgage:

Pay Your Consumer Proposal – The first step is finishing your Consumer Proposal, as it takes three years after completion for it to slide off your record – and that’s a big difference between bankruptcy and a Consumer Proposal to keep in mind. If you have any more questions about the difference between bankruptcy and a Consumer Proposal, feel free to ask us at David Sklar & Associates.

Get a Secured Credit CardSecured credit cards were made with rebuilding credit in mind; it’s backed by a savings account where you deposit money as a collateral. With a low limit, it gives you the chance to rebuild your credit at a low risk to the lender, rehabilitating your credit history.

Save a Down Payment – In Canada, down payment rules have changed. A five percent down payment is only the beginning; homebuyers must now provide a ten percent down payment on the cost over $500,000, which means most Toronto homes.

If you’re still not sure how you can rebuild your credit rating and get back on the path to saving for a mortgage, credit counselling at David Sklar & Associates can help. If you’re ready to start reaching for your financial goals again, contact us today to discover your path to successful savings. Your new home is waiting!

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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