How Julie & Mark Went From Consumer Proposal to 'A' Mortgage Rates
When we first met Julie and Mark, they were just a few months out of a Consumer Proposal and hoping to buy a home. When it comes to a Consumer Proposal or Bankruptcy, in order to borrow money a lender generally likes you to be at least 1 year past the end of the Proposal with 2 years of re-established credit. There can be some flexibility based on the loan-to-value (LTV) of your mortgage, so our team went to work finding a solution.
Julie and Mark had already done a great job of re-establishing their credit while they were paying out their Proposal, but they were going to need a mortgage to 80%. We were able to find a 'B' lender for a 3-year term that would finance 75% of the property, and added a small, private second mortgage on a 1-year term for the additional 5% of funds they needed.
Mark and Julie were able to continue improving their credit over the course of that first year, and their income also improved which put them in a much better situation when it came to looking at options to pay out the private portion of their mortgage. After evaluating the products available from our lenders, as well as assessing any penalty they might be subject to from their first mortgage lender, we refinanced the entire property (remaining amount in the 'B' first mortgage + payout of private second mortgage) with the existing lender. Mark and Julie ended up with a lower rate for the remaining 2 years of their mortgage term, and we were able to reduce their payments by $250 each month.
With their Consumer Proposal behind them and their credit well-established, Julie and Mark had set themselves up for a successful mortgage renewal at the end of their term. Our team reached out to them in advance of the mortgage end date and were able to find them a very competitive variable rate with an 'A' lender – plus they were able to pay off their car and a few small debts as part of the deal. Now that they're a variable rate client, our team continues to keep an eye on interest rates and we will let Julie and Mark know right away if something changes in the marketplace that could affect their mortgage.
If you're going through a Consumer Proposal or Bankruptcy, or have gone through one in the past, it doesn't have to mean the end of your home ownership dreams. It's possible to own a home, and with time, effort and support it's even possible to get 'A' rates for your mortgage, just like Mark and Julie.
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