Can a borrower mortgage their property after bankruptcy?
Getting a mortgage after bankruptcy is absolutely possible, as long as you and your borrowers are appropriately prepared.
While the banks may have differing feelings about a mortgage after bankruptcy, private lenders are different. And despite the bankruptcy staying on the borrower’s credit bureau for years, it doesn’t matter much to private lenders once the bankruptcy has been discharged.
However, it will be important that you are prepared for the questions the lender will ask.
Before you submit the file, create a narrative for the lender about why the client went bankrupt in the first place. It’s also important to explain how their current situation will ensure that the bankruptcy doesn’t happen again.
In other words, ensuring that it was no more than a one-time anomaly. Nothing more than a blip. And that the borrowers have taken steps to ensure that they won’t make the same mistakes twice.
There is no minimum time requirement to mortgage after bankruptcy for private lenders. Once the client has been discharged, financing can take place as early as the next day. Whereas with the bank it can take years after being discharged to qualify.
As a broker, consider adding bankruptcy trustees to your marketing contact list. They can be a great source for new deals. And an important part of your professional network as a broker.
And as always, be sure to give the lending experts at Kokanee Mortgage a call should you have any questions. They are always at the ready to help answer your lending queries. Their decades of experience can provide the knowledge and expertise you and your clients need to get the deals done. Whether you have a client dealing with a bankruptcy or any other lending issue, Kokanee Mortgage is always at the ready.