Can I Get a Mortgage after a Bankruptcy?
Yes, even if you have declared personal bankruptcy, you may still qualify for a mortgage in Canada. Generally, if you apply for a mortgage after bankruptcy, lenders will require you to start re-establishing your credit before they will grant you an after bankruptcy mortgage. In addition, before approving a mortgage to persons with bad credit, mortgage brokers will make sure that they qualify for the mortgage.
Here’s how you can qualify for a mortgage after bankruptcy:
First, once you are discharged, start saving money. You will need a down payment to buy your house.
Second, re-establish your bad credit – a post bankruptcy mortgage is much easier to obtain with a good credit history. The easiest way to do this is with a secured visa card. You deposit $1,000 with the credit card company, and they give you a credit card with a $1,000 limit. The credit card shows up on your credit report as a normal credit card; you have started to re-establish your credit.
Third, you should consider using some of your savings to invest in an RRSP. If you are a first time home buyer in Canada, you can borrow up to $20,000 from your RRSP to use as a down payment on your new home. Since contributions to an RRSP generate a larger tax refund, you can use your tax refund to grow your nest egg even faster. It’s a great way to build up a down payment, because you are using some of the government’s money to do it!
Fourth, be realistic in your goals. Start with a small house, and work your way up from there.
Fifth, shop around. After bankruptcy mortgage and loan lenders are plentiful. Be sure and select your mortgage broker carefully and get more than one quote.
Finally, to find out if you qualify for a mortgage after bankruptcy, contact a Mortgage Broker. He/she can also tell you how large a mortgage you can obtain. Good luck with your new house!