What you need to know if you've just arrived in Canada
Canada has received a large number of immigrants in recent years. At a time when so many new Canadians are trying to settle in this beautiful country, we wanted to take stock of certain aspects of mortgages and how newcomers can become homeowners.
If you already have permanent residence or have received confirmation of permanent resident status, you are eligible for a mortgage with a down payment of 5% - assuming you have a good credit history.
For permanent residents who have limited credit or people who do not yet have permanent residence but a work visa, there are also possibilities. Various mortgage programs are available to newcomers to Canada who want to buy a house, through CMHC, Genworth and Canada Guaranty.
To be eligible for these programs, you must have immigrated or moved to Canada in the past 60 months, and have had a full-time job in Canada for at least three months. Applicants requesting 90.01 to 95% credit must provide an international credit report (Equifax or Transunion) reflecting a strong credit profile OR two other sources of credit demonstrating payments on time (no arrears) during Last 12 months. Other sources must include the history of rent or electricity / utilities, telephone, cable, cell phone or auto insurance payment history. For people applying for 90% financing, a letter of recommendation from a recognized financial institution OR six months of bank statements from a main account is required.
A mortgage broker will help you understand your options, and they can help you determine what is the best mortgage program and choice for you. Before you consult it, there are some things to know in order to apply for - and obtain - your first mortgage in Canada:
- 1. Supporting documents: If you have just arrived in the country and have a poorly developed credit file, supporting documents will be useful for you. For example, this could be proof of income, proof of 12-month rent payment or a letter from the landlord, documents showing you have savings, bank statements or a letter of recommendation from a recognized financial institution. Such documents tell the lender if you represent a safe investment for him.
- 2. Credit Score: The credit score is one of the most important elements to get a mortgage. It shows how much you are a trustworthy borrower and will determine the percentage of your down payment. One of the best ways to ensure a favorable credit score is to get a credit card that you will use and pay off the balance each month. Paying other bills, such as utilities, phone and rent, can also help your credit and reliability.
- 3. Savings: One of the most expensive aspects of buying a home is the down payment. This up-front amount is vital for your future. The minimum required can be 5% or 10%, depending on your situation. Be aware that if you pay $ 500,000 or more for your home, the minimum required will be 5% for the first installment of $ 500,000, plus 10% for what exceeds $ 500,000 - regardless of your residence status. .
- 4. Choosing a Mortgage Lender: Once you are ready to take out a mortgage, you still have to decide who you want to get it from. There are three main possibilities: a bank; a credit union or other credit union; or a specialized lender. You also have the choice of dealing directly with the lender or going through a mortgage broker, who might get you better deals.
Buying a house is always an exciting project, but even more so for people who have just arrived in the country. It is also a project which may seem difficult to carry out, but which is entirely possible with a little knowledge and preparation!