It can be difficult to be in a new country, but getting a mortgage doesn't have to be! If you are a permanent resident or in the process, there are many options for those of you who are new to Canada.
If you are new to Canada, most lenders will need to get a mortgage loan in order to purchase a home. A newcomer mortgage is a special mortgage program offered by some banks in Canada for those new to Canada. These are designed to help newcomers get a mortgage even if they don’t meet the eligibility requirement for a regular mortgage. There are two main reasons why it can be difficult for newcomers to get a regular mortgage include:
- Lack of Employment History:
Usually. banks like to see that you have been employed for at least 2 years in Canada. Showing you have a work history and a stable level of income
- Lack of Credit History:
Any lender will look at your credit report to see how you have been handling debt. This includes a history of payments, such as whether or not you have missed any payments or made payments, along with your balances and credit limit. A credit report shows that you have been consistently paying off your finances.
Mortgages for those new to Canada can be insured against mortgage default by the Canada Mortgage and Housing Corporation (CMHC), Sagen, or Canada Guaranty. These insurers all have basic borrower qualifications to be eligible for a new to Canada mortgage.
- Have Immigrated to Canada within the last 5 years
- Must have legal status in Canada. Meaning you must be in Canada as a temporary or permanent resident. This means that you should be a permanent resident/landed immigrant, or be a non-permanent resident with a work permit.
- Been employed full-time in Canada for at least 3 months. In some cases you might not need to have 2 years of employment history for a new immigrant mortgage, you will need to have at least some full-time employment history. You will need at least three months of full-time employment history in Canada.
- Must have at least a 5% down payment. This is a minimum down payment requirement, but it can be higher if the home price is over $500K. Down payment with 2 years employment history in Canada and you are able to put 20% down. If yes, you will be able to qualify for a conventional mortgage. If you are not able to raise at least 20% of the down payment there are still options for new to Canada Mortgage Program. The only difference is your mortgage will be insured if you default.
As a new to Canada, and becoming a homeowner. This is one big step and experience that when purchasing a home is going to change your life forever. This part I love to be involved and help you find the right lender. I invite you to contact me today to schedule a no-obligation consultation. During that meeting, we can further discuss the requirements for a new resident mortgage and determine which mortgage product is right for you.