08 Aug “Welcome to Canada” mortgage program
If you are new to Canada and are looking into settling in this country, you may want to consider purchasing a home. The first step you should take is informing yourself about the rules and conditions that apply to your situation. It may seem a very daunting process, but it really isn’t when done properly. Remember that you don’t need to pay it all at once. If you are part of this group, you belong to one of the following categories: you are here on a work visa or you are a landed immigrant who is employed; you are a non-landed immigrant who is employed; or you are a new immigrant not yet working but you have applied for (or you have already been granted) landed immigrant status.
This is where it all begins. In order to qualify for this program, you must be employed for at least three months before you are eligible for a mortgage. As you know, a mortgage is the money you will borrow from a lender in order to make your purchase. The reason for the three month period is simple: the lender needs to know that you, as an employee, have passed the three month probation period with your employer. Besides this “probation pass”, the lender will ask you to provide them with a history of your credit repayment. (See our blog post on credit score and credit bureau for more). Consider having a record from your country of origin as that will help tremendously when it comes to approving you for a mortgage.
Just because you have a great credit report from your country of origin, it doesn’t mean you should not build your credit history in Canada. To the contrary, you should consider establishing one. The easiest way to do so is to apply for a credit card and make payments on time. Some lenders will also take into consideration a copy of recent utility bills or a letter from your landlord detailing your payments. Do not forget that these “advantages” only apply to you the first three years of being in Canada. After that you are no longer considered “new” to the country.
To go back to the first category – people on visas and landed immigrants employed for at least three months – your financing should not be an issue as long as you have a strong credit report. In other words, you qualify basically like a Canadian citizen. If you are part of the second group – non-landed immigrant employed for at least three months – you also need to prove your credit history, but your financing is slightly lower. Furthermore, you are also limited in the sense that you do not qualify for refinancing and you may be requested from the lender to prove that you have applied for landed immigrant status. Finally, if you are part of the third group – new immigrants without landed immigrant status or employment – you will also need to prove your credit history, and the percentage for qualification is lower. You will need a larger down payment. In all three scenarios, we strongly advise you to get insurance. (See our post on mortgage and life insurance).
The Costa Group professionals are here to help you through this process and settle in this great country you chose to be your new home. Follow us on social media and/or contact us for more.