Mortgage Post Bankruptcy

CoryVance • Feb 13, 2019

This should come as no surprise, but sometimes life throws you a financial curveball. Bankruptcy and consumer proposals happen. It doesn’t mean your life is over, and it doesn’t mean you won’t ever qualify for a mortgage again. The key here is to get a plan in place and show that you’ve got things under control. You must be able demonstrate to anyone considering you for financing that what happened in the past won’t happen again in the future.

Mortgage financing post bankruptcy is possible, it’s just different than your standard mortgage financing in that the following considerations must be taken into account.

Firstly, financing will be dependent on how long it has been since you were discharged from your bankruptcy, or how long since you completed your consumer proposal. Most lenders consider the discharge date on both to be your new ground zero.
Secondly, financing will be dependent on how you have been re-establishing your credit since your discharge date. Also, how in depth that credit is. A $700 Visa is nice, but a $5000 Line of Credit carries a little more weight.

In order to qualify for mortgage financing with a mainstream lender, they will want to see a minimum of the following before they will give you a mortgage. You must be discharged for at least 2 years, have at least a 5% downpayment from your own resources (although 10% is a safer bet), 2 years of credit established through 2 trade lines with a minimum credit amount of $2500 each, and no late or missed payments. This would be the bare minimum to qualify.

As mortgage professionals, our job is to provide solutions and strategies for our clients. As such we have access to lenders who aren’t mainstream. These alternative lenders will consider extending mortgage financing when clients have a larger downpayment. You’re looking at 20%-25% downpayment minimum, and the interest rates will be a little higher than mainstream lending. Alternative lending isn’t for everyone, but it’s a great solution for some, especially those who have gone through a bankruptcy or consumer proposal.

So whether you’re looking for a plan to help you qualify for a mortgage with the most favourable terms, or if you need something more immediate. Please don’t hesitate to contact me anytime. I would love to help outline your financing options and give you a plan so that you can get a mortgage post bankruptcy.

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CORY VANCE

403-614-9211

cory@coryvance.ca

What You Need To Know About Online Mortgage Calculators

By Cory Vance • 23 Apr, 2024

You’d think an online calculator is a pretty straightforward device, one that you should be able to place your confidence in, and for the most part, they are. Calculators calculate numbers. The numbers are reliable, but how you interpret those numbers, not so much, especially if the goal is mortgage qualification. If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed. Don’t be fooled. Even though an online mortgage calculator can help you calculate mortgage payments or help you assess how additional payments would impact your amortization, they’ll never be able to give you an exact picture of what you can afford and how a lender will consider your mortgage application. While mortgage calculators are objective, mortgage lending isn’t. It’s 100% subjective. Lenders consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase. Then, they will compare that with whatever internal risk profile they are currently using to assess mortgage lending. Simply put, they don’t just look at the numbers. An online calculator is a great tool to help you run different financial scenarios and help assess your comfort level with different payment schedules and mortgage amounts. However, if you rely on an online calculator for mortgage qualification purposes, you’ll be disappointed. The first step in the mortgage qualification process is a preapproval. A preapproval will examine all the variables on your application, assess your financial situation, and provide you with a framework to buy a property based on your unique circumstance. Securing a preapproval comes at no cost to you and without any obligation to buy. It’ll simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. Something a calculator is unable to do. Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.

Understanding the Recent Housing Affordability Measures in Canada

By Cory Vance • 19 Apr, 2024

In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers. Increased Home Buyer's Plan (HBP) Withdrawal Limit Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market. Extended Repayment Period for HBP Withdrawals In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment. 30-Year Mortgage Amortizations for Newly Built Homes Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively. Changes to the Canadian Mortgage Charter The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship. The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country. As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances. If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.