When it comes to getting approved for a mortgage, a bankruptcy can make it more challenging, but not impossible. The hardest part is being patient. It takes time to get through the bankruptcy process, and more time to renew a financial reputation.

Steps to get approved after a bankruptcy:

1.       START SAVING – once the bankruptcy has been discharged, set aside as much as possible for a down payment.

2.       RE-ESTABLISH CREDIT – apply for a secured credit card. A secured credit card is a bank credit card where the funds are deposited before they are spent. On a credit report, the secured credit card shows up as a regular credit card. After six months or longer, request a regular credit card – it will transfer across on the credit report.

3.       BUY RRSPs – first time homeowners can withdraw up to $20,000 from RRSPs to use as a down payment. Plus, since an RRSP generates a larger tax refund, the extra money can be added towards more savings.

4.       BE REALISTIC – bankruptcies are rough, but the freedom from debt is incredible. Keep that liberation by house-hunting sensibly.

5.       CONTACT US – to find out if all the steps have been reached to qualify for a mortgage after bankruptcy.

TIMELINE: Most homebuyers qualify after 2 years from a bankruptcy discharge and 1 year of established credit.

NOTE: Be careful to avoid entering a CONSUMER PROPOSAL. They are not the best option when personal financial stability has failed.

OUR BEST ADVICE? Bankruptcy can be a humbling experience. We as a team are well aware of the financial challenges facing many Canadians today – especially post-recession. No matter what scenarios borrowers face, it is our priority to be knowledgeable, honest and sensitive. Let us help them get back on their feet.

To your homebuying success,

The Trimor team!