We’re always happy to provide mortgages for newcomers to Canada. A mortgage for new immigrants is specifically designed to make the purchase of a home as easy as possible for new immigrants and is often considered an important step to becoming established in Canada. It is possible to finance the purchase of a home without citizenship or even a long credit history in Canada. Fortunately, there are several options available to make a purchase possible.
Down payments for newcomers to Canada can be as small as 5% of the total value of the home. Smaller down payments require better credit histories and larger incomes. Small down payments also require greater amounts of documentation to satisfy lenders.
Credit in Canada is not mandatory in order to obtain a mortgage, but a solid record in Canada helps to make the process easier. Anyone newcomers looking to take out a mortgage should try to meet Canadian credit requirements.
For applicants who wish to make a down payment that is below 10% of the property’s total value, an international credit report is required. Those reports are most readily available for immigrants arriving from the United States or the United Kingdom. It is advised to contact a financial institution in your previous country of residence for details on obtaining a credit report from that country. Applicants with the intention of making a down payment that exceeds 10% of the property’s value require less documentation. Two forms of credit reference either from your bank or credit card company.
The other documentation that will be required in the mortgage process will include, but is not limited to, copies of your work permit or landed status papers, a passport and social insurance number, income verification from your Canadian employer, and Canadian bank account statement showing the down payment history.
People who can prove good credit from their country of origin are eligible to receive the same low rates that Canadian citizens with good credit are eligible for. The exact rate available will be based on a combination of your credit history and income level.
Similarly, the products that new immigrants can qualify for are the same as those available for citizens. Amortization periods can range up to 35 years. Interest rate terms can be either fixed or variable.
The best way to start of a solid Canadian credit history is by obtaining a credit card. Banks will require you to deposit an amount equivalent to the limit on the card. If you make regular payments on the card and stay within your limit, the bank will typically return the deposited amount after one year.
Within the first year, it is possible to obtain department store credit cards once the secure card is established. Outlets including The Bay, Sears, and Home Depot will often issue low-limit cards to people with little or no credit. Be careful, though, these cards come with very high-interest rates. Be sure to pay off the card every month in order to avoid paying large amounts of interest.
The best first step is to talk to an experienced, licensed Mortgage Professional. We have helped many new immigrants get started in the Canadian real estate market. Contact us to speak with a broker or apply now to receive a free quote.