Getting a mortgage after bankruptcy or a consumer proposal

How lenders view a past insolvency

Lenders want to see two things: that the insolvency is fully behind you, and that you've handled credit responsibly since. A discharged bankruptcy or a completed consumer proposal is the starting line, not the finish. The date of discharge or completion matters more than the date you filed.

Different lenders set different waiting periods after discharge before they will consider an application. Mainstream lenders and insurers tend to want a longer clean history, while alternative lenders may look at a file sooner, usually at a higher cost. Typical waiting periods: [PLACEHOLDER: current lender and insurer waiting periods after discharge or completion].

Rebuilding your credit

Re-establishing credit is the single most useful thing you can do. Many people start with a secured credit card or a small instalment loan, keep balances low and pay every bill on time. Two active credit accounts with a consistent history is a common lender expectation, though requirements vary.

Pull your credit reports from both Canadian credit bureaus and confirm the insolvency is reported correctly as discharged or completed. Errors are more common than you might think, and fixing them before you apply can save a lot of frustration.

Down payment and documents

Expect lenders to look closely at where your down payment comes from. Savings that have built up in your own account over several months are the easiest to document. Gifts from immediate family are often acceptable with a signed gift letter.

Have your discharge certificate or certificate of full performance ready, along with the usual income documents. A short written explanation of what led to the insolvency, and what has changed since, can help an underwriter understand your story.

Choosing the right path

Sometimes the best plan is a shorter-term mortgage with an alternative lender, followed by a move to a mainstream lender once your credit is stronger. Other times, waiting a little longer gets you better pricing from the start. Our brokers can lay out both options with real numbers so you can decide what fits your budget and timeline.

How our brokers can help

Active Mortgage is a team of brokers working with a range of lenders. We can review your situation, explain the options that apply to you and compare real offers side by side. There's no cost to talk with us, and you're never under pressure to proceed.