New to Canada? Mortgage Options Are Within Your Reach

John Antle | Mortgages Beyond The Bank

Your Kelowna Mortgage Broker

Financing a new home purchase is a fairly simple process for Canadian citizens. However, for newcomers to Canada with limited Canadian credit history, the process is slightly more complex.

In assessing mortgages for newcomers to Canada, lenders and financial institutions primarily focus on three key elements: the size of your down payment, your credit history within Canada, and your residency status.

At John Antle, we can help you navigate the mortgage process and find a path to Canadian homeownership.

New immigrants in Canada have access to various mortgage options. If you’re a newcomer to Canada, reach out to John Antle. We’re here to help find the right mortgage solution for you.

If I am a permanent resident, can I get a mortgage in Canada?

Yes, this is the best scenario. Permanent residents with a good credit score and cash for a minimum down payment of 5% will be treated just the same as a Canadian citizen by a financial institution or mortgage lender. They will therefore have an easier time securing a mortgage via their applicable new to Canada program.

Can non-permanent residents get a mortgage?

Without permanent resident status, mortgage lenders might require a larger down payment to approve mortgage loans, generally 10% of the purchase price. If you have a valid work permit, and have applied with the Government of Canada for permanent residence status, approval for a mortgage with as little as 5% of the purchase price as down payment is possible.

Will Canada consider my credit history from another country to approve a mortgage if I am New to Canada?

Sometimes people will supply a letter of credit from their existing bank in their home country, or an international credit report, to be considered for a mortgage approval. There are other ways to confirm credit history from non-traditional sources, such as showing:

  1. Rental payment history for a minimum period of one year.
  2. Regular savings in a bank account for minimum period of one year
  3. The Canada Mortgage and Housing Corporation (CMHC) will also consider proof of at least 3 payments of other debt for minimum of one year (for example: utility bill or insurance)

Are there other ways that I can prove my credit worthiness to be approved for a mortgage if I am New to Canada?

There are other tasks you can complete to confirm your credit worthiness and help qualify for mortgage programs, such as:

  1. Prove consistent payments of bills (rent, utilities, cable, insurance)
  2. Bank statements demonstrating the regular use of a bank account in Canada
  3. Apply for a credit card
  4. Purchase and finance a vehicle
  5. Long-term employment history with the same company

Will I receive the same interest rate as others if I am New to Canada?

Yes, the mortgage interest rates and terms lenders offer are the same for newcomers to Canada as for Canadian citizens.

If I have a large down payment does that make things easier for a lender to approve my mortgage?

Yes, remember that if you have a minimum of 20% of the home’s purchase price available for a down payment, you only are approved by the lender, and CMHC mortgage default insurance is not required. Without the requirement for mortgage insurance, you can significantly reduce your total cost of borrowing.

What property types are available for mortgage loan insurance for non-permanent residents?

Non-permanent residents can get mortgage loan insurance for properties with 1-4 units, provided at least one unit is owner-occupied, under the New to Canada Mortgage program.

What are the credit score requirements for a New to Canada Program Mortgage?

For a New to Canada Mortgage, at least one borrower or guarantor needs a minimum credit score of 600. However, if you don’t have a credit history, CMHC may consider alternative ways to establish your creditworthiness.

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