Cracking the Code on New to Canada Mortgages 

Despite immigration slowing due to closed borders during the pandemic, the Canadian housing market has shown unprecedented strength. Rolling into the back end of the pandemic, the "endemic," we expect to see NEW TO CANADA MORTGAGE TIPS maximum numbers of new immigrants arriving in Canada. The Canadian government had approved many applications, and those candidates are now able to arrive. It will be more important than ever that New to Canada borrowers understand their mortgage options so that they can secure housing in their new home.  

Mortgages for newcomers to Canada

If you or your family are planning on arriving in Canada in 2021 or 2022, it's important to reach out to a mortgage broker and figure out what the mortgage process could look like for you. Some borrowers decide to purchase a property before they arrive in Canada so that they know their landing spot. Other borrowers decide to arrive and rent for a few months so that they can get the lay of the land. Depending on your down payment and employment situation, there are a few different scenarios that might work for you.

Purchasing a home after your family arrives in Canada 

If you decide to arrive in Canada and then secure your property, you've got a lot of flexibility to obtain a mortgage. If you've got a valid work permit and employment in Canada, for all intents and purposes, obtaining a mortgage for you is the same as if you're a Canadian with limited credit history. Here are the requirements:

  • Minimum of 5% down payment (from your own resources, this cannot be gifted)

  • Secure employment with guaranteed hours, verified with a letter of employment.

  • Your most recent paystub confirming your hours

  • Proof of credit history. This can come from a landlord letter, an international credit bureau, proof of car payments, insurance payments, or anything else that proves that you can make your monthly payments on time.

Tips for new to Canada borrowers

Many New to Canada borrowers will obtain a lease on a new apartment in just one person's name. 

If you're married, make sure that both your name and your spouse's name are included in the lease when you sign it. 

  • This can act as alternative credit for both you and your spouse.  

  • Make sure that if you're planning on using money from your home country, the country isn't on the "sanctioned countries" list. If it is, no worries, just note that the funds must be in your Canadian bank account for 90 days before you can write an offer on a home.

  • Make sure that as you're trying to establish your credit in Canada, you don't let everyone that asks pull your credit bureau. 2-4 pulls each year is really all you should allow. Working with a mortgage broker will help keep your credit bureau pulls to a minimum.

  • If you are planning on opening a business or working for yourself, it might be advisable to purchase a home first. In Canada, borrowers that own their own businesses have to show two years of income history in order to apply for a loan. It's an awesome goal to work for yourself, but make sure that you meet your homeownership goals before business ownership goals because it's much easier to achieve it in this order!

Purchasing a home before you arrive in Canada

If you want to close on your home before you arrive in Canada, there are a few ways to make this happen. Some of the major banks have "Non-Resident" programs and many Alternative, and Private lenders have "non-conforming" programs that allow you to purchase a home without traditional employment income. Here are the documentation and down payment requirements to participate in one of those programs:

  • Closing on a home when you are not in the country requires you to have at least a 35% down payment.  

  • Typically, you will be required to show 1-2 years of principal, interest, and property tax payments in a bank account in Canada.  

  • You will have to provide an international credit bureau proving good credit standing in the country in which you currently live.

  • You will have to be able to meet with the lawyer via zoom.

  • You will be required to wire your down payment funds to the lawyer's trust account.

  • You will have to sign the legal documents in ink and then overnight those documents, via a courier, to the lawyer's office in Canada.

 

 

Mortgages for newcomers to Canada

Whether you are purchasing a home in Canada when you arrive or beforehand, you want to make sure that you're working with a team of Real Estate professionals that are familiar with this type of purchase. Lean on your team to answer all your questions and help you navigate your Canadian home purchase with the least amount of stress.  

 

New to Canada Mortgage brokers

Thank you to our mortgage partners at the Spire Mortgage team for assistance with this blog, fill out the form below to have someone from the Spire mortgage team reach out to get you started with your next mortgage anywhere in Canada! Spire mortgages

 

You can also reach out to Spire mortgage directly by calling

Renee Huse 

(403) 804-5465

 

 

 

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