NEW TO CANADA
Canada is a country of immigrants. Both the country and the banks have programs to help new immigrants to settle in for both their employment and their place to live. Some immigrants came to the country with wealth and some immigrants came to the country with skills, but most of them do not have an established Canadian credit history. Banks’ New to Canada mortgage programs catered to these two types of immigrants.
For the immigrants who brought in substantial wealth to Canada, and can afford to come up with 35% down payment most banks will offer them a mortgage without any verification of income or Canadian credit history. Some banks may ask the borrower to have additional funds such as 12 months mortgage payments. Some even asked them to hypothecate this additional funds in the bank’s GIC during the term of the mortgage. Typically, the maximum size of the mortgage is $1.5M with the longest amortization being 25 years. Interest rates will be the same that the bank offer to other local Canadians.
For the immigrants who came to the country as professionals, the banks along with the mortgage insurance companies (such as CMHC, Sagen, and Canada Guaranty) offer a mortgage with down payment as low as 5% of the purchase price. This type of mortgage normally has a maximum purchase price of $1M and maximum 25 years amortization. Borrowers need to show that they are employed. Banks may also ask for the credit history of their previous home country or credit card statements to show that they always paid their debts on time. Some banks may require the borrowers to show 6 months of Canadian rent payment as a form of Canadian credit history.
Typical Documents Required
- Permanent Residency (PR) Card
- Canadian bank statements showing the required down payment
- Employment letter (in Canada)
- Rent payment or utilities payment for the past 6 months in Canada
- Credit bureau from previous country of residency, or credit card statements
How can we help?
Since most of the immigrants are not familiar with Canada’s banking system, they need more guidance in obtaining the right mortgage. They may even want to have a mortgage pre-approval prior to the purchase. Typically, it takes longer time to process this type of mortgage applications.
At iBrokerPower Capital, we have experts that know the ins-and-outs of different banks’ New to Canada Program. We offer professional advice to prepare you prior to the purchase. Some of us may even be a new immigrant at one point in our lives. So, we know how to help!
Bonus – do you know that the some of these New to Canada programs also apply to purchasing a Rental Property?