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Apply for a mortgage after consumer proposal?

A person was in consumer proposal in 2012. He has completed the consumer proposals in Nov 2013. The person is now having credit cards. Is the person can apply for residential mortgage to buy a new home?

Posted from: Ontario

One Response to “Apply for a mortgage after consumer proposal?”

Doug Stuive, CA | Trustee | CIRP said...

The are three factors that the bank looks at when deciding if a mortgage will be granted to a consumer. The first item is the income of the household, which may also include the length of time you have been employed. The second item is your debt to income ratio. Provided you have not built up a balance on your credit cards after completing your proposal your debt ratio should be low, which can work in your favour. The last item they look at is your credit score. One year after filing a consumer proposal your credit score may still be too low for the banks to approve you for a mortgage, even if you meet the other two criteria.

Before making an application for pre-approval on a mortgage to the bank, I would recommend that you complete a credit check on yourself. Make sure that all of the creditors that were included in your consumer proposal are not showing as active, collectable debt. Also make sure the date you completed your consumer proposal is reported accurately in the credit bureaux. Correcting any errors before you make an application for a mortgage is a good first step.

If your credit report is in order then you should make an appointment with a representative from your bank to discuss whether you would be a good candidate for a mortgage. It may be that you would not qualify right now, but the representative should be able to provide you with some steps to take that will help you to get pre-approved in the future.