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Using Your Mortgage to Payout a Consumer Proposal in BC

You can use your home equity to get a mortgage to payout a consumer proposal. Usually when people use a consumer proposal it is to assist them with restructuring their debts into a manageable payment. Once they have done this home owners usually see significant cash flow relief, but they still have this monthly bill looming over them and wonder how to payout this consumer proposal.

Benefit of paying out a consumer proposal early

The benefit of paying out a consumer proposal early is it allows your credit to recover instantly. Major banks will want to see a min of 24 months discharged from a consumer proposal. However, B-Lenders do have some products that will allow you to refinance your 1st mortgage to payout a consumer proposal and assume the consumer proposal into the mortgage. This enables you to clear out the consumer proposal fast and start improving your credit years earlier.

Types of Financing & mortgage to pay out a consumer proposal

There are a variety of ways to payout a consumer proposal with financing:

  • Mortgage financing is one way. While the large banks do not get involved with financing out consumer proposals mortgage brokers have access to B-Lender mortgages & Private mortgages that will in some cases consolidate a consumer proposal into a first mortgage. Keep in mind that this requires you to payout your 1st mortgage to consolidate into the mortgage to payout a consumer proposal.
  • Second mortgage financing is another way to use a mortgage to payout a consumer proposal using a home equity loan. With home values going up you can tap into the equity built up in your home to payout a consumer proposal. In some cases, this is a far cheaper way to go. It allows you to keep your 1st mortgage in place at the best rate possible and allows you to payout the consumer proposal instantly. Once your 1st mortgage comes up for maturity you can consolidate the 1st & 2nd mortgage usually back at a major bank usually within 2 years.
  • There are also financing companies that will provide you a loan to payout a consumer proposal. These loans are sometimes at a very high interest rate and a short term. The benefit is you are paid out of the consumer proposal right away. The con is you are stuck with another high rate loan with a large payment which can trigger a payment issue moving forward.

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