Private Mortgage Solution for Borrowers with Consumer Proposal
What You Need To Know
A Consumer Proposal is a type of insolvency proceeding that is available to individuals who cannot pay their debt as it becomes due. The proposal allows individuals to set up a settlement plan with their creditors and to make a proposal to creditors under which they will pay back a portion of what they owe. The money they pay back is based on a percentage of the total debt owing. The proposal can be made by the debtor, his or her licensed insolvency trustee or jointly by the debtor and the creditors. If a proposal is accepted, the debtor must abide by the terms of the proposal, typically for between one and five years, depending on the amount of the debt.
Alternatively, borrowers can consider a mortgage solution from private lenders to pay off the Consumer Proposal sooner. Private lenders have more flexible lending guidelines than traditional lenders, and they focus on the value of the property and less on the creditworthiness of the borrower.
At Canadian Private Mortgage, our clients know that we won’t steer them into any products or financial terms that don’t fit their personal goals.
Our private mortgage solution for borrowers with a Consumer Proposal is ideal for property owners who are willing to improve their borrowing habits and return their financial situation back to normal. Any proposed lending solutions will include an exit strategy that enables clients to get back to normal as soon as possible.
Lending Solution For Borrowers with a Consumer Proposal
Improve Creditworthiness After A Consumer Proposal
Having a Consumer Proposal is considered to be a negative record on a borrower’s credit report and would affect the personal credit score for years.
One of the best ways to improve the credit score after a Consumer Proposal is to get a secured credit card with a small credit limit and make sure to pay off the balance in full by the due date. Over time, this responsible habit of borrowing and paying in full will improve the borrower’s credit score.
Financing Options for Borrowers with History of Consumer Proposal
The process of obtaining financing for borrowers with a history of a Consumer Proposal is much simpler done with a private lender than the process imposed by traditional lenders. Although private lenders will still ask to verify some information to satisfy their internal lending guidelines, in general, it may actually be faster and easier.
Private lenders assess a mortgage loan application based on the property value and its location in the neighbourhood. A property appraisal is certainly a requirement that borrowers will need to satisfy as part of the refinancing process.
Also, generally speaking, private lenders will allow higher loan-to-value (LTV) than traditional banks and lenders.
Private lenders are an ideal option since they are not tied to the same lending guidelines as traditional lenders which is limiting. Unlike bank loans, private lenders focus more on the value of the property and the borrower’s exit strategy to determine the terms of the loan. This means that they will not make any preconditions on the borrower’s credit score or debt to income ratio.
A big advantage of hard money lending is that you can beat traditional lenders’ interest rates and timeframes. While traditional banks are known for their long loan terms, hard money loans can close in just days or weeks. This is important in time-sensitive situations, such as a Consumer Proposal arrangement. Getting a mortgage loan approved faster helps you resolve your personal situation faster and avoid delays.
Origination fee can also be referred to as “commitment fee”, or any other name. It usually refers to the underwriting or processing fee. This fee can cover a variety of expenses, from processing the loan to underwriting the loan. The amount of this fee depends on the lender and the type of mortgage loan. It is always stipulated in writing so there is no bad surprise to the borrowers on the closing day. If you are not sure how much you are paying for your origination fee, it is a sign that you are not working with an ethical private lender. Be aware and find other private lenders who are transparent with their origination fees.
At Canadian Private Mortgage, we disclose our commitment fee clearly in writing from the beginning of the process.
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What Our Clients Say
Andrea Chase, Hamilton, ON
I had 2 yrs left on my consumer proposal, with the 2nd mortgage offer by Matrix Mortgage Global I was able to pay off the proposal and re-establish my credit
Steve Darcy - Surrey, BC
I own a historic mixed use commercial/residential building that I wanted to modernize. Matrix Mortgage Global provided me with a term loan to complete the renovations
Blake Taylor - Banff, AB
I own a family bed and breakfast just outside Banff and ran into some tax arrears. Our bank turned us down for a commercial loan. Matrix Mortgage Global provided us with a 2nd mortgage which we used to pay off the tax arrears.
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