Welcome to Canada! Entering and settling in a new country can definitely be a big adjustment. If you’re planning to make Canada your home, then you’ve probably already started to think about buying a new home.
First, you should know what it will take to secure a mortgage in Canada. As a new arrival here, you can secure the financing you need at competitive rates.
This article will cover information for:
-
Individuals on a Canadian work visa or employed landed immigrants
-
Non-landed immigrants who are employed
-
New immigrants who are in the process of applying for, or who have been granted landed immigrant status, but who are not yet working
New Canadian Mortgage Eligibility
When you are new to Canada, before you can be eligible for a mortgage, you need to be employed for at least three months. This is a general rule for most lenders, as it’s the typical probationary period under the employment standards act, unless otherwise specified by your employer. If you have credit reports or bank references from your home country, this also help lenders when assessing your repayment history and credit. This will essentially help you to strengthen your mortgage loan application.
Since you’re new to Canada you won’t have Canadian credit history. As such, you need to start building and/or creating some. Apply for a credit card. If you can get approved for traditional credit, then try to get secured credit. With secured credit you’d pay the creditor upfront and once you’ve showed them you alway pay on time for a minimum of one year, you’ll get the security payment back.
It can be hard to establish credit in Canada, but lenders do recognize this as well. Therefore, they’re also willing to accept letters from your landlord or copies of utility bills. Basically anything that shows consistent on time monthly payments for a 12-month period. However, after three years you’ll no longer be considered a “new immigrant,” so after this point lenders won’t be as flexible.
Work Visas & Employed Landed Immigrants
If you’re in canada on a work visa, or you’re landed and working for at least three months, you can get financing of up to 95 percent providing you can provide the required proof of strong credit and on time payments.
Non-Landed Immigrants (who are employed)
If you are not landed in Canada, but you have been employed in Canada for at least three months and you meet the credit guidelines, you can also get financing of up to 90 percent. However, this financing only covers purchases not refinancing for a single-unit home. Note that you should be in the process of applying for Canadian landed status, because your lender will check.
Non-Working New immigrants (without landed status)
If don’t have landed status and are not employed in Canada, you’d only be eligible for financing between 65 and 75 percent of the property value. You must a strong credit history and be able to show lenders that you have assets which you can liquidate. The liquidation amount must be able to cover six months payment on your mortgage, mortgage interest and your property tax.
These are just some basic guidelines to help you in applying for your first mortgage in Canada. But before you do, speak to a financial expert about mortgage pre-approvals. We can assess your personal situation.
To learn more about financial options for new immigrants to Canada, reach out to our team of professional brokers.
When we say Yes! We stand behind our promise ®.