New to Canada
If you are new to Canada – welcome!
I am so pleased to help you in your quest to buy a home in your new country. You’re not alone – new Canadians are making their numbers felt in the housing market, as they get settled and make the transition from renter to owner, by purchasing their first homes in this country. Over 280,000 new immigrants arrived in Canada in 2010, the highest amount in 50 years according to the Department of Citizenship and Immigration.
New to Canada mortgage challenges
For new Canadians, first-time home ownership may prove harder than expected, as you face some unforeseen obstacles, but there are definite opportunities. Some of the challenges you will face include:
Lack of Credit History
The biggest challenge for new immigrants is establishing credit because you do not have a financial history in Canada. Without a credit history, it can be a struggle to get mortgage financing. Because of this, it is important to start establishing credit soon after arrival in Canada. If you are able, bring credit and bank references (preferably in English) with you from your home country, to help with developing a Canadian credit profile. I invite you to take a look at my article “Establishing Credit” which offers some suggestions on getting good credit established as quickly as possible.
Large Down Payments
Another home ownership hurdle immigrants have faced is that many financial institutions traditionally have insisted that new immigrants provide a down payment of at least 25 to 35 per cent. A large down payment may be difficult for some, because they are self-employed and working to establish their own business, or unable to access funds from their home country.
The good news is that things are changing. More and more lenders in Canada are offering mortgages tailored to the needs of new immigrants, including those with non-landed status. It is possible for immigrants to get a mortgage with a down payment of as little as five per cent of the value of the property, as long as it comes from your own resources.
To start preparing to apply for a mortgage, the following materials should be assembled:
- Copies of your work permit/landed status papers or passport
- Social insurance number
- Employment letter(s)
- Credit reference(s)
- Documentation of the down payment money source
- Bank statements showing 90 days of account activity
How a mortgage professional can help you
The great news is that mortgage agents can streamline the mortgage process for new immigrants, from counselling on credit in Canada, to advising on the best lenders to work with, and explaining your options.
If you would like to discuss your own personal financial situation, please get in touch with me!
Photo credit: [c] Michael Jastremski for openphoto.net
Connect