Does consumer proposal affect mortgage renewal?

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A consumer proposal might make you think twice about mortgage renewal, but staying with your current lender often simplifies the process. Remember, your credit score could dip, affecting interest rates or switching lenders. Keep up with payments, and things should go smoothly.

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Consumer Proposal Question

Does consumer proposal affect mortgage renewal? I’m wondering if having a consumer proposal could affect my ability to renew my mortgage when the time comes.

From: Anonymous Question
Location: Whitehorse, Yukon (YK)
Category: consumer proposal

Consumer Proposal Answer

Sure thing! So, while a consumer proposal might stir up some thoughts about your mortgage renewal, it’s usually not a major roadblock with your current lender. Sticking with them often makes the renewal process pretty smooth—even in the middle of a consumer proposal. Keep in mind, your credit score might take a hit, which can cramp your style a bit when trying to nab lower interest rates or hop to a new lender. But as long as you’re on top of your mortgage payments, things should flow well.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, a consumer proposal can affect your ability to renew your mortgage. While specific mortgage lenders have their own criteria, the existence of a consumer proposal typically indicates financial stress, which may lead to a reduced credit score and affect your overall creditworthiness. According to the Bankruptcy and Insolvency Act, which governs consumer proposals in Canada, when a consumer proposal is in effect, it is registered on your credit file and can impact your credit rating for up to three years after completion. It is important to discuss your specific situation with your lender or a financial advisor to understand how the proposal may influence your mortgage renewal options.

From: OSB Helper

Related Questions to Mortgage Renewal

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

1. Can I renew my mortgage while in a consumer proposal?

Yes, you can renew your mortgage while in a consumer proposal.

2. Will a consumer proposal affect my mortgage renewal rates?

In most instances, a consumer proposal will not significantly affect the rates offered for mortgage renewal, though rates might be slightly higher in some cases.

3. Can I switch to a new lender for mortgage renewal if I am in a consumer proposal?

Yes, you can switch to a new lender, but you may face higher interest rates due to your credit history.

4. How does a consumer proposal impact my ability to refinance my mortgage?

Refinancing your mortgage while in a consumer proposal is possible but typically requires qualifying at current interest rates and often involves higher interest rates from B-grade lenders.

5. What are the considerations for maintaining good standing with mortgage payments during and after a consumer proposal?

Maintaining a good track record of making mortgage payments consistently and on time is crucial to ensure a smooth mortgage renewal process and to signal reliability to the bank.

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

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