Even the best of intentions, with supportive actions, still may not give you a clean bill of credit health.  Angee & Mario married young.  At age 18&19 respectively, they started their working lives in B.C.  He was brought up in a  "do-it-yourself" environment of. As a jack of all trades, he certainly could fend for himself, although formal education was not a priority.  She was a hairstylist.  They struggled like all newlyweds.
Life would soon deal them another blow with the arrival of  baby Torrey at a time when finances were already tight.  They worked as hard as they could but the bills kept coming.  He held down 3 part-time jobs as well as his fulltime work in a hardware store.  She would cut neighbours hair in their one room apartment.  The bills kept coming.  When the creditor phone calls were too much to handle, instead of seeking the ultimate solution, bankruptcy, they sought refuge in Ottawa.  They thought that time and distance would give them a reprieve from creditors.  They left no forwarding address when they left B.C.  It was like they had vanished off the face of the earth.
It worked!  The one room squalor they called home only cost them $250/month.  His new job at a lumber yard allowed him all the overtime he wanted.  She got a job immediately at a beauty salon with a daycare centre next door.  Systematically, they focussed on one debt at a time and managed to pay off all six of their credit cards and a loan over a one year period, without ever letting the creditors know where they were living. They paid off a whopping $8000 of debt and were able to put aside another $6000 in cash.  Finally, they felt the it was time to move up in the world.  They had paid back all of their creditors, and they had saved up down payment money, it was time to buy a modest home in the country.  Mario's father recently passed away and left them a newer car, a little money and a whole lot of tools.
Their shopping led them to an older home that was neglected.  It needed a some TLC.  Mario was just the man for the job but first they had to buy the unit. The asking price was $65,000.  He made an offer of $60,000 which was accepted. The real estate agent put in a clause for financing.   The plan was to put down $3000 (5%), keeping a little money for closing costs (ie. legal fees, disbursements, taxes, appraisal fees etc.)  Confidently, they applied for a mortgage at their bank.  They felt proud to convey their ancient credit problems and what they had done to pay off everybody.  Their mortgage lender took down all the information, asked a bunch of questions, and said things looked good.  Four hours later, the loan officer called with a different tone in his voice. The application had been denied due to overall credit history.  Their current credit ratings were all R-1 (best rating one can get), but historical ratings from the credit card companies and the loan company were rated poor (R-4, R-5).  Even though they refused to go bankrupt, and they had done without to pay their creditors, the mortgage was denied.  The system had dealt them a blow for being stellar citizens?  Did they not demonstrate character, backbone, willingness to pay, manageability of money affairs?  Should this not enter into the overall capacity to repay the mortgage?  Apparently not!  The mortgage officer did say that if they could get a co-purchaser, they would re-submit the deal to Canada Mortgage & Housing Corporation (CMHC).
They had nobody to sign for them.  Their Realtor asked me if I could do something.  I obtained all the supporting paperwork from the lender and commenced my own credit and background check.  I was convinced that these kids would never ever miss a mortgage payment but I could not project my sense of confidence to a lender to submit the application to CMHC.  I'm not so sure that the property would have fit CMHC's profile in any case.
I chose to approach a lending institution that could lend up to 85% financing without going the CMHC route.  We explained the whole credit information melee.  The lender did background checks with Mario's present and previous employers.  The all spoke very highly of his willingness to work and his pride of workmanship.  Angee's employers also spoke very highly of her dedication to both work and child.  The mortgage was approved for 85% financing at a rate that was considerably higher than the bank rate.  We were still short 10% (that's 85% financing from the lender and 5% cash down payment form the kids).  The Realtor approached the Vendor of the property who was willing to lend the last 10% at a very reasonable rate.  Both mortgages were for a three year term, after which, if the credit ratings remain good, we will be able to approach a regular bank to replace this unusual financing.  Mario & Angee have new confidence in the system that almost abandoned them.