Once in a while life tosses you a financial curveball. It does not imply that you won't qualify for a mortgage but it can complicate things. The secret to financial success is getting things organized before you start the mortgage process. You must show the prospective lenders that what took place in the past will not happen again in the future.

If you're thinking of getting a mortgage post-bankruptcy, lenders will have some questions for you to answer:

Discharge Date

Qualifying for a mortgage will depend on how much time it has been since your bankruptcy took place. A lot of lenders think of the discharge day to be your new ground zero. While there is no specific waiting period for when you can attempt to secure a brand-new home mortgage post-bankruptcy, most lenders will look at how you're managing your finances after your financial difficulties.

Credit Score Improvements

Showing lenders that you have vastly improved your credit score after personal bankruptcy and handling any debt flawlessly is key to securing your future mortgage.  So as soon as you've been discharged, it's a good concept to have a reporting card which will aid in repairing your credit. The best scenario is to rebuild your credit within the 2-year period. The lender will want to see that you have 2 credit accounts with a credit limit of $2500 or more. It is very important to make your payments on time as missed payments will be a red flag to lenders that you may still be a risk.

Down Payment Amount

The more cash you can put towards purchasing a property, or the more equity you have in your current home the far better your opportunities of securing a mortgage.  The bigger the down payment the more comfortable the lender feels when approving you through their institution.

Debt to Service Ratio

Another consideration lenders will certainly look at is how much cash you make compared to the cost of your potential mortgage payment. So, it probably goes without saying that the more money you make compared to the quantity you want to borrow the better.

Insured Financing

If you're wanting to obtain the best home loan products readily available, here are a few things a lending institution will want to see:

• A discharge date of at least 2 years plus a day

• You've greatly improved your credit score

• Having 5% down for the initial $500k of the purchase and also 10% down for anything over $500k

• Provide 20% down payment or pay the insurance coverage (CMHC)

• Provide proof that your debt to service ratio does not surpass 44% of your gross earnings

Alternate Borrowing

As independent mortgage experts, our work is to offer options as well as proven effective strategies for our clients. Because of this, we have access to a variety of lenders who focus on working with clients whose financial scenario are less than perfect. These exclusive mortgage providers use different financing options that take into consideration your overall strength of your unique home mortgage application.

While you won't qualify for the very best of current market rates and terms by going this route, if you're looking for choices, you might discover that alternate lenders are a practical solution for you. This method isn't for everyone, however, if you've undergone a personal bankruptcy or consumer proposition and need a home mortgage before completely re-establishing your credit then this can be your saving grace.

Lets Talk

So whether you're looking for a strategy to help you get approved for a home mortgage with the best terms or if you need something quickly. Please feel free to contact us anytime. It would certainly be our privilege to go over your options and work on a strategy to assist you with all your mortgage needs.