Getting settled in a new country comes with a number of challenges, but in most cases people who are new to Canada can obtain a mortgage at competitive rates. The guidelines and financing options are different depending on the situation:
- In Canada on a work visa or an employed landed immigrant
- Non-landed immigrants who are employed
- New immigrants who are not working (yet) but who have applied for, landed immigrant status
Lender Rules for Obtaining a Mortgage in Canada
Unless a person has transferred to Canada as part of a corporate relocation program, new Canadians must be employed for at least three months before they can apply for a mortgage. This means they have passed their probationary period with an employer.
A history of credit repayment is also important, so apply for a credit card and make sure that you make your payments on time. Lenders will consider credit history from alternate sources, such as a letter from a landlord showing 12 months of on-time payments or copies of utility bills showing payments being made on time for a year.
How People New to Canada Can Obtain a Mortgage
- Work Visas and Landed Immigrants. People in this category who have been employed for at least three months can qualify for up to 95 percent financing, if they can show proof of 12 months of timely payment of two alternative sources of credit, such as cable bills, cell phone or utilities, or a strong international credit report. They can only borrow against their primary residence, but with that exception, for borrowing purposes are treated the same as other Canadians.
- Non-landed Immigrants who are Employed. Non-landed immigrants who have been employed for three months and meet the same credit or alternative credit qualifications listed above can qualify for up to 90 percent financing. They are limited to purchase transactions for a single unit primary residence only and cannot refinance a property.
- New Immigrants who do not have Landed Immigrant Status. New immigrants in this category can borrow 65-75 percent of the value of a property, as long as they can provide a lender with a strong credit history. Borrowers who need 65 percent financing also need to show liquid assets equal to six months of mortgage principal, interest and property taxes. To borrow 75 percent of the value of a home, a borrower must show additional liquid assets which are equal to 25 percent of the home’s purchase price. The property must also be used as the borrower’s primary residence.
To get the best rate on a mortgage for new Canadians, work with a mortgage broker. Mark Price will shop the market for you to help you get the best the best deal for your situation. Call him today to find out how he can help you find the right lender.