Guidance for Getting a Mortgage Following Bankruptcy

ByLuke Wile

Posted in Mortgage News:

If you’ve been unfortunate enough to go through a bankruptcy or consumer proposal, and need to apply for a mortgage loan to purchase a property, you’ll find that it might be a lot tougher than you anticipated.

Around 100,000 Canadians apply for bankruptcy or a consumer proposal every year, and this can be for any number of reasons, from the closure of a business to a divorce. The situation can be stressful and depressing enough, without then learning that applying for a mortgage is going to be problematic.

Fortunately, while the application process is more difficult and your eligibility will be scrutinized, there are some options available to you if you’ve been declared bankrupt and want to apply for a mortgage.

Can You Apply for a Traditional Mortgage After Bankruptcy?

If you’re ready to buy a home and have a past bankruptcy on your credit report, it’s still possible to qualify for a traditional mortgage—but you’ll need to meet specific requirements:

  • Have been discharged from bankruptcy for at least two years and one day
  • Have established credit for 2 years of that duration
  • Have the ability to put a 5% down payment on the property you wish to buy

While you may still be able to obtain a mortgage within the two-year discharge window, you’ll likely need a larger down payment and will be subject to higher interest rates from alternative lenders.

Working with a Mortgage Broker

The mortgage process after bankruptcy can feel overwhelming, but working with an experienced mortgage broker can make things much easier from the beginning. A broker can help you:

  • Get clear on what you can realistically afford
  • Connect with lenders who are open to working with clients with past bankruptcies
  • Find the best available rates and terms based on your situation

Brokers have access to specialized lenders that may not be available directly to the public—making them a valuable resource if you’re navigating a mortgage post-bankruptcy.

Other Tools to Help You

Aside from seeking help from a local mortgage broker, there are a few other tools that you can take advantage of to help you, such as an online mortgage calculator, which can help you understand what you can afford. Seeking a mortgage pre-approval can also help you understand what you can realistically expect to be approved for, and your mortgage broker can help you with this.

If you’ve been through bankruptcy and are hoping to purchase a home, know that you still have options. While the process will require more preparation and effort, working with a knowledgeable mortgage broker can simplify the journey and improve your chances of success.

Many reputable brokers offer free consultations, and there’s no downside to getting advice tailored to your unique financial situation.

Call us at 403-460-7707 or Contact Us online to schedule a no-obligation consultation today.