Mortgages for Canadian immigrants

Living in Canada is one dream, but owning your own home is another. If you are new to Canada and are wondering what the mortgage options are for immigrants, get in touch with us. We can refer you to several great mortgage brokers.

Mortgage brokers ‘shop’ for your mortgage at many different lenders, including banks. A bank itself, can only offer its own products. Either way, talk to both bank and mortgage broker to learn about your options for a mortgage. If it appears that you are not ready to get a mortgage, the mortgage agent or banker is able to advise you on the actions to take in order to secure a mortgage down the road.

Down Payment

Starting with the down payment; if you are a Permanent Resident, you need a 5% minimum down payment if the purchase price of the home is under $500,000. Is the purchase price over $500,000? Then you need a down payment of 10%.

If you are a Non-Permanent Resident, you need a 10% minimum down payment. A minimum of 5% down payment must come from your own resources. The remaining 5% may be gifted from an immediate family member or from a corporate subsidy. Acceptable forms of down payment can come from savings, RSP’s, funds from the sale of a property, or via a non-repayable financial gift from a relative.

Mortgage qualifications for immigrants

Once you have the down payment in order, you still must qualify for a mortgage. Qualifications are:

• You must have immigrated to Canada within the last 5 years.
• A Permanent Resident status (landed immigrant status) or a valid work permit is required.
• You must have a minimum of 3 months of full-time employment in Canada. (Professional employee relocation may be exempt from this requirement).
• No mortgage wrongdoings, such as bankruptcies or foreclosures are permitted.
• All your debts held outside of Canada must be included in your application.
• And foreign rental income may not be used to help you qualify.

Credit rating requirements

Canada is all about credit ratings. When you are new to Canada, it is advised to start building a credit rating as soon as possible! An immigrant to Canada needs to  provide the following information to prove credibility for a mortgage:

• Documentation via the international credit bureau.
• 12 months of rental payment history. A letter from your landlord must confirm this history. In addition, this letter from your landlord must be supported by all 12 bank statements.
• At least one utility payment, also confirmed via a letter from the service provider. Or 12 months of bill statements that confirm regular payments.
• 6 months of provable bank statements from a recognized Canadian financial institution or from a financial institution of the country of origin.
• And a letter of reference from your financial institution of the country of origin that confirms a minimum of 6 months of a satisfactory banking relationship.

General requirements for all Canadians applying for a mortgage

Every Canadian applying for a mortgage must meet the so-called stress test. This means you must qualify at the 5-year benchmark rate, for a maximum of 25 years amortization. On top of this, most mortgages need mortgage insurance. This insurance is, just like the stress test, required for every qualifying Canadian.

Our services for immigrants buying a home

We have helped many immigrants buy a home in Calgary. In fact, almost half of our clients are from different countries and different cultures. A rough count shows that we have helped buyers from more than 30 different countries and backgrounds. We have had the privilege to meet, work for, and learn from people from Ethiopia, China, Russia, Egypt, Brazil, India, the Philippines, South Africa, and many European countries. It is great to see so many dreams of home ownership come true!

We are immigrants ourselves. And that is most likely the main reason we attract first time home buyers from other countries. We came to Canada in 2004, and we can relate to many of the questions and hurdles that are involved when immigrating to a new country.

We are often able to answer many questions about getting started, and how things work in Calgary. In general, we can help you with questions about insurances, taxes, schooling, sports etc. Of course, more specifically, we are very happy to help people on their way to becoming home owners!

 

Please note: The above is general information. Mortgage rules are (often) subject to change. Always contact your banker or mortgage broker for the latest requirements! We do our best to write informative articles about real estate in Calgary, Alberta. If you have any questions or concerns about our comments, please feel free to contact us.