Can you get a mortgage with a consumer proposal?

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Getting a mortgage while you’re in a consumer proposal is possible, but not always easy. Lenders usually wait for your proposal to be resolved or require you to prove you can manage both proposal and mortgage payments. Post-proposal, show a stable two-year track record to get better terms from traditional lenders.

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Consumer Proposal Question

Can you get a mortgage with a consumer proposal? I’m curious if being in or completing a consumer proposal makes it harder to get approved for a mortgage.

From: Anonymous Question
Location: Moncton, New Brunswick (NB)
Category: consumer proposal

Consumer Proposal Answer

Sure thing! Getting a mortgage while you’re in a consumer proposal isn’t impossible, but it might not always be smooth sailing. Lenders often hold off on giving the green light until your proposal is sorted, or they might ask you to show that you can handle both the proposal and mortgage payments like a pro. If you’ve already got a mortgage, you’re generally safe, but snagging a new one could see you facing steeper interest rates or extra fees—especially if you dance with alternative lenders before wrapping up that two-year stint post-proposal. And post-proposal completion? Traditional lenders typically want to see a solid two-year track record of financial stability before rolling out the red carpet with better terms. So, buckle down and show them what you’re made of!

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, you can get a mortgage while you are in a consumer proposal; however, it may be more challenging to obtain approval. Lenders typically view consumer proposals as a red flag due to the implication of prior financial distress. According to the Bankruptcy and Insolvency Act, specifically Section 68, lenders have the discretion to evaluate your financial situation, including any consumer proposals, which can impact their lending decision. Additionally, while regulations do not specifically prohibit mortgage applications during or after a consumer proposal, it is generally expected that you will need to demonstrate improved financial management and a stable income to increase your chances of approval.

From: OSB Helper

Related Questions to Mortgage Approval

Here are the top 5 most frequently asked questions related to getting a mortgage after a consumer proposal, based on the provided sources and general online trends:

1. How long after a consumer proposal can you get a mortgage?

• You can get a mortgage at least two years after the full completion of your consumer proposal, although some lenders may approve sooner with a 20% or more downpayment.

2. Will a consumer proposal affect my existing mortgage?

• A consumer proposal does not directly affect your existing mortgage as long as you continue to make your mortgage payments.

3. Can you get a mortgage during a consumer proposal?

• While it is possible to apply for a mortgage during a consumer proposal, lenders typically prefer to wait until the proposal is fully completed and court-approved.

4. What steps can I take to improve my chances of getting a mortgage after a consumer proposal?

• To improve your chances, you should rebuild your credit history, secure a new line of credit (like a credit card), and demonstrate responsible financial management over at least a two-year period.

5. Do I need to make a substantial down payment to get a mortgage after a consumer proposal?

• Making a substantial down payment (around 20%) can reduce your liability to the lender and improve your chances of getting a mortgage, especially if you apply before the two-year waiting period is over.

If you have a question about debt see our debt questions or ask your own debt related question.

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