How lenders read a proposal
During an active proposal, bank mortgages are essentially off the table, though some alternative lenders will consider a buyout or purchase with strong equity and trustee cooperation. Once the proposal is completed, the clock starts: most alternative lenders want one to two years of rebuilt credit, and insured bank mortgages generally want two years of clean history after discharge.
Rebuild immediately, not eventually
The day your proposal is completed, get a secured credit card, use it for small regular purchases, and pay it in full every month. Add a second small tradeline after six months. Two active, perfectly paid tradelines is the standard lenders look for, and every month of history compounds.
- Secured card immediately after completion
- Two tradelines reporting within the first year
- Keep utilization under thirty percent, ideally lower
Check your reports for errors
Debts included in the proposal should report as settled with zero balances, and they often do not. Pull both bureaus, dispute every account still showing a balance or active status, and keep the completion certificate handy. Cleaning these errors can lift a score faster than any other single action.
The mortgage conversation, honestly
At two years post-completion with two clean tradelines and a reasonable down payment, mainstream options reopen. Before that, alternative lenders fill the gap at a premium. Either way, the proposal fades every month, and the borrowers who planned the rebuild during the proposal arrive at eligibility a full year sooner than those who started after.
Frequently asked questions
- Can I get a mortgage while still in a consumer proposal?
- Rarely, but it happens: strong equity, trustee consent, and an alternative lender. More common is paying the proposal off early as part of a refinance using home equity.
- How long does a proposal stay on my credit report?
- Generally three years after completion, though its effect on lending decisions fades much sooner with rebuilt credit on top of it.
- Is a proposal better than bankruptcy for future mortgages?
- Marginally, mainly because it resolves faster and shows creditors were partially repaid. Both are workable; both reward early, disciplined rebuilding.