LTV – Loan To Value ratio. The amount being borrowed versus the value of the property. A $190,000 mortgage on a $200,000 property would produce a 95% LTV ratio.
TDS – Total Debt to Service ratio. The amount of debt being serviced as a percent compared to the total income.
A traditional insured mortgage. Any non private mortgage in Canada with less then 20% down must be insured. To obtain mortgage insurance through CMHC you will require at least 2 years of discharge from bankruptcy and at least 1 year of re-established credit on two credit items (credit card, loan, etc.). Genworth insurance requires 2 years bankruptcy discharge and 18 months of re-established credit.
A subprime mortgage. A subprime mortgage is a mortgage that falls just outside of CMHC insured lender guidelines. These lenders assist borrowers who are not bad off enough for a private mortgage but will not qualify through a traditional lender.
A private mortgage. Most private mortgages will require 15% down and have an annual interest rate of between 12%-15%. Usually a borrower can obtain a first mortgage from a traditional lender up to a specified
percentage (at a much lower interest rate) and a private mortgage can be used to top up what is required to finance the home.
If you have had a bankruptcy and have been discharged and are looking for a mortgage, apply online .
Re-establishing Your Credit After Bankruptcy
The biggest challenge in Canada in obtaining a mortgage after bakruptcy is re-establishing your credit. To assist in getting a mortgage after bankruptcy I would highly recommend obtaining two secured credit cards. A secured credit card is just like a regular credit card, however for every $1 you put down as a deposit, you will get $1 in credit. There is virtually no risk to the issuer so you are almost guaranteed to be approved. This will help to build that re-established credit that will be required when it comes time to applying for a mortgage.
Here are a couple of companies that issue secured credit cards.
Capital One – minimum $75-$300 deposit required
Peoples Trust – minimum $500 deposit required
To obtain a free credit report and tips to improve your credit score, see learn about your credit .