Mortgage Options For New Comers

It is a big step when you are immigrating to a new country, in this case, Canada. Starting a new life in Canada is a daunting task, and if you are looking to buy property to settle with your family, several lenders offer a variety of mortgage options for immigrants to help them get settled in Canada. Below-mentioned takes a look at mortgage options for Canadian immigrants, how do they work? Which bank will offer them a loan? What are the requirements to qualify for a loan as an immigrant?

All you need to know about mortgage options for newcomers

The mortgage options for immigrants are lenient when compared to mortgage options for permanent residents of the country and Canadian citizens, where the bank and other lenders will look at their credit and employment history. For a newcomer to be considered a Canadian citizen, they must be living in the country for less than five years. A non-permanent resident will incur a higher down payment. The minimum down payment for immigrants can be anywhere between as low as 5% for properties less than $500,000, or it can be as high as 35% if the individual does not have a credit history.

A tip for immigrants is to quickly build their credit history in Canada because not all lenders will allow non-residents to purchase property in the country.

What is an immigrant mortgage?

Most citizens in the country will need to apply for a mortgage when purchasing a property. A newcomer mortgage is a special type of mortgage offered by a few banks in the country for those individuals who have just relocated to Canada. They are created to help immigrants get approved for a mortgage even if they fail to meet the eligibility requirements for a mortgage. Below mentioned are the reasons why it may be difficult for newcomers to get their mortgage approved:

1. Lack of employment history

Most traditional lenders will like to see that you have been employed for at least two years in the country. An individual having an employment history will prove to the lenders that you have a stable level of income.

2. Credit history in the country is not established

A lender will look at your credit report and history to see if you are capable of handling debt. This may include looking at your payment history, and whether you have defaulted on any payments or made late payments. An established credit history shows the lenders that you can handle your finances. For those newcomers, you might not have a credit or work history. With the help of a newcomer mortgage, banks are more lenient with the eligibility requirement. However, the immigrant will need to meet certain eligibility to be considered as an immigrant.

Who is eligible for a newcomers mortgage?

Mortgages for those new to the country can be insured by the Canada Mortgage and Housing Corporation (CMHC). The above-mentioned insurer will have basic borrower qualifications to be eligible for an immigrant mortgage:

If you meet the above-mentioned requirements, you are on your way to choosing your mortgage lender. It could range from major Canadian banks to smaller lenders. You can also work with a real estate broker like Royal Canadian Realty to help secure you a mortgage to purchase your dream home.

Steps to getting a mortgage as an immigrant:

1. Find out how much you can afford on a property

Start by identifying how much you can afford. It can help with your property search. You don’t need to settle for a house that is way above your budget. Knowing your mortgage affordability will help you make a well-informed decision. You can calculate your affordability by using various online calculators. It will give you an outline, including helping you start saving up for a down payment.

2. Build your credit history in the country

You should try to build your Canadian credit history even before you decide you want to purchase a house. It can be something as simple as paying off your telephone or cable bills. Many traditional lenders will offer credit cards to immigrants that have little to no credit history. This will allow them to start establishing a credit history and build up their score.

3. Get your mortgage pre-approved

It is ideal for immigrants to get their mortgage pre-approved by a bank or a lender. Through this, you will know the maximum amount the lender or bank is willing to give, as well as the rates and monthly repayment amount. You will also receive a pre-approval letter which you can use when shopping for property. Moreover, you will also know how much down payment you will need to make.

4. Find a reputable real estate agent

Once your finances are in order, it is time to find a reliable real estate agent like Royal Canadian Realty to help you find the right property and make an offer. After your offer has been accepted, you will need to get it approved. You can shop around with various lenders or avail of the services of a mortgage broker to help you identify a mortgage with favourable rates and terms.

FAQs

1. Can I immigrate to Canada and buy a property?

Purchasing property in Canada does not mean you are granted permanent residency status. You can buy property in the country as long as you can afford it. However, owning a house does not increase your chances of permanent residency.

2. Can foreign nationals get a mortgage in Canada?

Yes, foreign nationals can get a mortgage to buy a home in the country. However, the criteria will be more stringent. For instance, if they can make a minimum down payment of 35% or more, you will need a reference letter from the bank, including providing your income proof as well as getting your international credit report checked.

3. Will I be able to qualify as a newcomer for incentives as a first-time homebuyer?

If you are a non-resident, some provinces might not offer a land tax rebate. For instance, the city of Ontario only provides a land transfer tax rebate for first-time homebuyers that are permanent residents and Canadian citizens.

If you are a newcomer to the country and looking to settle down by purchasing a house, you can get in touch with the team at Royal Canadian Realty to help with your property as well as your mortgage needs.

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