The Bumpy Road home from Bankruptcy
September 9 2015 Posted by Mary Poburan
Life is unpredictable and sometimes there are no alternatives to Bankruptcy. If that is your path, is there any hope to future home ownership?
That is a tough question to address. The rules regarding financing after bankruptcy are always changing. In some cases, lenders will not consider a post bankrupt client no matter how strong the rebuilt credit is. If a house was included in the previous bankruptcy that is an even bigger obstacle that almost always ends up in a 'NO'. Most lenders require 2 years to have lapsed since DISCHARGE and they want to see 2 pieces of reestablished credit in existence for at least 2 years. This means loans or lines of credit with fairly substantial limits. a $500.00 credit card wont do the trick.During this time, NO LATE payments will be tolerated
Another important requirement is that the down payment will need to be 10-15% in many cases and the majority of the funds should come from savings. A gifted payment in this case is not warranted.There are always exceptions to every rule but as the economy in Alberta slows, lenders and insurers are becoming more wary in evaluating risk level. In order to assess your situation it is important to discuss the strategy well in advance for the road to recovery from Bankruptcy can be a bumpy one. I'm happy to come along for the ride to help navigate!
Mary Poburan
Senior Mortgage Consultant

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