Will A Consumer Proposal Affect My Mortgage?
“Will a consumer proposal affect my mortgage?” The answer is “no” so long as your payments are being made on time.
Your mortgage can’t be terminated because of a consumer proposal
The Bankruptcy & Insolvency Act states that “no person may terminate or amend any agreement, including a security agreement, with the consumer debtor, or claim an accelerated payment, or the forfeiture of the term, under any agreement, including a security agreement, with the consumer debtor, by reason only that the consumer debtor is insolvent or a consumer proposal has been filed in respect of the consumer debtor“.
Will a consumer proposal affect my mortgage renewal?
If your mortgage payments are being been made on time, you shouldn’t have any issues renewing your mortgage with your current lender.
Will a consumer proposal affect a new mortgage application?
On the other hand, if you would like to move your mortgage to another lender, you will need to make a new credit application and will undergo a credit check.
Since a consumer proposal does negatively affect your credit rating, it may be challenging for you to obtain a mortgage at a preferred rate. It’s also quite possible that your mortgage application might be refused. We would suggest that you contact a licensed mortgage professional to evaluate your individual circumstances.
What a mortgage professional might suggest is that you take steps to start rebuilding your credit as soon as your consumer proposal is approved by your creditors:
- If your goal is to apply for a new home mortgage, lenders generally use a 2/2/2 rule: 2 years discharged, 2 new credit accounts, $2,000 minimum credit limits with good repayment history. The easiest way to start is to obtain a secured credit card. Because your credit utilization rate is a major factor in your credit score, try to get card with a moderately higher credit limit (e.g. $2,000) – using a card with too low a credit limit will be of limited use in rebuilding your credit score.
- Use your credit card consistently – use it for everyday purchases and pay off the balance in full at the end of the billing cycle. By doing this, you’re reestablishing your payment history. Doing this over a long period of time will gradually increase your credit score since the length of your credit history contributes to your credit score.
- Once you’ve established a track record with your secured credit card, you’ll be getting offers from credit card and loan companies. Don’t accept too many offers in too short a period of time, since data related to new credit applications contributes to credit score.
If you want to work with a Trustee who will give you confidence and peace of mind that your consumer proposal is being dealt with in a professional manner, look no further.
Reviews of Our Services
Victor was quick to contact me and the consistent contact was amazing. Victor is really passionate about listening to my needs and it showed as his service with me was nothing short of an amazing experience. He went out of his way to meet on my sched and his attention to detail is exceptional. If yo
Victor and his team (Mary) were always extraordinarily prompt with their responses to any inquiries and went out of their way to respond to questions in detail. They were extremely helpful at all times, even after my Proposal was completed. VIctor is an excellent advocate for his client's needs and
Victor and his team were amazing. Treated us with the upmost professionalism. Answered all our questions, took care of everything and turned an unfortunate situation and made it much less stressful. I highly recommend Fong and Partners. Thank you all for your support through the process.
Working with Victor Fong was great. We just finished our consumer proposal a week ago and the entire process was quite easy. Mary was amazing at answering all my questions and accommodating me when I had any questions or concerns. Her response time was impeccable. Our initial meeting with Victor wa
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