If you are a Canadian citizen, financing a new home purchase is a fairly simple process and can be accomplished, in most cases, with a minimum down payment of 5%. For newcomers to Canada with limited Canadian credit history, the process is slightly more complex.
When it comes to mortgages for newcomers to Canada, the main factors that lenders and financial institutions will consider are the amount of your down payment, your Canadian credit history and your residency status.
There are options to get a mortgage for new immigrants in Canada. If you are a newcomer to Canada, contact John Antle mortgage professionals to learn how we can help 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 sufficient cash for a 5% down payment will be treated just the same as a Canadian citizen by a financial institution or lender and have an easy time securing a mortgage.
Can I be approved for a mortgage if I am not a permanent resident?
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:
- Payment of rent for a minimum period of one year.
- Regular savings in a bank account for minimum period of one year
- 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:
- Prove consistent payments of bills (rent, utilities, cable, insurance)
- Bank statements demonstrating the regular use of a bank account in Canada
- Apply for a credit card
- Purchase and finance a vehicle
- 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 rates and terms offered by lenders 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 loan insurance, you can significantly reduce yourr total cost of borrowing.
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Our team is devoted to helping you achieve your long term goals. Enjoy options and possibilities that you may not have considered when sticking with traditional banking products. If your goals include paying down your mortgage faster or looking for a rental income to make some headway on your amortization we are happy to discuss all of your options. Your Kelowna Mortgage Broker is able to help you with your first mortgage or renegotiating the terms on an existing property. Call John Antle Mortgages in Kelowna today and let’s get started!
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