Canada seems to be a pretty attractive place to live, which means we have a lot of people moving here from other countries. Luckily we have a mortgage program to fit that situation and help these newcomers purchase a home here. There are two main types of mortgages for new-to-Canada clients. They are an insured mortgage, and a conventional uninsured mortgage.
I will go over both types and what is needed for each, but the main common denominators between the two are:
- Do not need to have established Canadian credit (Helps but is not needed)
- Have a work permit, application in for permanent residency or have permanent residency
- Must have been in Canada less than 60 months
- Down payment must be in Canada prior to mortgage funding
An Insured New-to-Canada mortgage would be one where the client has less than 35% down payment. Here are the main qualifications a client should have in this scenario:
- Proof of minimum 3 months full time employment
- International Credit Bureau demonstrating a strong credit profile
- Or two alternative sources of credit established for past 12 months demonstrating timely payments
- Rental payment history
- One other alternative source (Hydro / utilities, telephone, cable, cell phone or auto insurance.
- If the client has 10% or more down payment they may also get a letter of reference from a recognized financial institution OR six months of bank statements from primary account.
- Down payment is verified via a 90 day account history and must be deposited in a Canadian account before purchase completes
A Conventional New-to-Canada mortgage would not carry any CMHC or other lender insurance premiums. This mortgage would require 35% or more down payment.
Here are the main differences from an insured mortgage:
- An appraisal will be required paid for by client (Rebates may be applicable)
- No income requirement
- Applicant must have additional savings to cover 12 months of principal, interest and property tax payments
- Max mortgages of up to $1,500,000 in Greater Vancouver Area and Greater Toronto Area otherwise rest of Canada a max of $1,000,000
Those are the main points for each type of mortgage in this situation although there will be other small points that may come up with each different client. Please note that if an applicant has established a negative Canadian Credit History that the banks can decline them based upon that.
Contact me with any questions,