Many find it difficult to obtain approval for a mortgage when bankrupt, but there are options available to overcome the challenge. A successful result is dependent on patience as time is required to create a renewed financial reputation and work through the bankruptcy regulations. Learning how to dig out of the bankruptcy hole can help you achieve financial freedom and home ownership.
Get into a Savings Habit
Consult with a legal representative to determine the best bankruptcy options for your specific case needs. Upon discharge, work towards building a savings plan by putting away an amount that you can afford on a weekly or monthly basis. The purpose is to raise funds that can be used as a down payment for the future purchase of property.
Work on Credit
Consider application for a secured credit card that is a bank credit card where the funds are deposited before it can be spent. This eliminates the risk of accumulating debts with a conventional credit card but provides a benefit of showing as a regular credit card on a credit report. Once a six month period has passed, one may apply for a conventional credit card for financial reports.
The option to buy RRSPs can prove most beneficial for the first time homeowner. This includes a withdrawal of up to $20 000 that can be used as a home down payment. Additional savings can be achieved as an RRSP generates a larger tax refund that can be added to the deposit.
Remain Objective and Realistic
Bankruptcy may be one of the hardest processes one has to work through. Remaining disciplined can achieve financial freedom more efficiently. Staying within affordable parameters in the search of a house proves responsible.
Consult with the Professionals
Contacting professionals like a Capital Mortgage Broker can aid in determining qualifications for a loan after bankruptcy. The average period of filing as bankrupt and working through the legal and regulatory process is two years. Individuals will have to provide proof of a year of established credit to apply for a mortgage.
Obtain Sound Advice
Filing as bankrupt can prove time-consuming and requires a degree of modesty to reach financial success. The aftermath of the recession has left a large number of Canadians having to face financial uncertainty and unforeseen challenges. We can provide comprehensive, honest and sound advice for borrowers who are struggling to establish their credit and work towards a favorable result in the pursuit of purchasing a home.