March 15th, 2008 by Questions
I live in Ontario and I heard that the minimum required down payment of 25% after bankruptcy has been lowered to 20%. Is this correct?
March 17, 2008 at 8:27 am, A licensed trustee said:
I think you may be confusing a number of different things…
First, there are no bankruptcy specific rules regarding mortgages after you’ve been discharged.
The 25% down-payment you may have heard about is in order to qualify for a conventional mortgage. That means a mortgage that does not require insurance from CHMC. I haven’t heard that the downpayment has been reduced to 20%, but that is possible – check with your lender.
I can tell you that it is very difficult to obtain a mortgage in the first few years after you have been discharged and it is quite likely you will be required to pay a higher rate of interest when you are approved.
We tell people to carefully shop around – you probably only want a 1 or 2 year term on the first mortgage you are approved for. Once that time has elapsed you should qualify for normal interest rates.
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