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Thread: Newcomer to Canada, Is it possible to get a Mortgage?

  1. #16
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    Quote Originally Posted by tjthemanto View Post
    Just rent an apartment for a year or so, close to your workplace. Get a hang of the country, culture, workplace, commute, transport, food, weather, stores etc before buying the house. Once you buy a house, you will be pretty much stuck in one place for the first few years & it won't be too flexible.

    Right now if you buy a house in ON , especially GTA , it will be very expensive & you will be buying at the PEAK . Prices are definitely coming down due to the bad economy. There won't be a crash, but a correction in the ridiculous house prices is definitely in the order in 2016 , especially in Vancouver & Toronto ( GTA ). Its already happening in Calgary.

    If you are making a 15 % down payment and have a decent steady job & are buying within your budget, you should get the MTG. if its double income ( both spouses working ), it should be OK . Just go for a variable mortgage right now, the interest is less than fixed rate mortgage, and the rates are NOT going up any time soon, due to the economy.

    Also you might have to go for a 25 year amortization, anything less might be too tight for you, although you will save in Interest if you go for a shorter amortization say 15-20 yrs. But the payments will be higher & the stress with it. You can always make a certain ( allowable & without penalty ) lump sum each year to reduce & pay off your MTG, usually its 10 % of the total MTG.

    Thanks tjthemanto, Valuable Information.
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  2. #17
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    Thanks all for your suggestion. I really appreciate .

    I will work on your suggestions, think of renting first.

    Thanks So Much Guys,

    Rajwinder Singh
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  3. #18
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    I will keep checking this thread, if anyone come-up with any new or important suggestion , do leave here. I will keep checking.

    Thanks
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    Quote Originally Posted by rtbc View Post
    I will keep checking this thread, if anyone come-up with any new or important suggestion , do leave here. I will keep checking.

    Thanks
    1. Go for a variable rate as opposed to fixed rate. Fixed rate gives you peace of mind, but its always higher than variable rate. In the last 30-35 yrs in Canada the people, who went with a variable rate as opposed to fixed rate have almost always come out ahead . You can always lock the variable rate into fixed rate, if you think rates are going up. I don't see the varable rates going up anytime soon, due to the economy and oil prices, if at all they might actually go lower by 0.25 % !!

    2. See how much pre payment you can make each year without penalties. These are lump sum payments you can make towards the mtg. Could be 10 % or more. This will greatly reduce your amortization and interest you pay over the years.

    3. If you make 20 % or more downpayment , you can avoid the mandatory CMHC mortgage insurance.

    4. Go for weekly or bi-weekly payments as opposed to monthly mtg. payments, you will greatly reduce the amortization. So paying $ 500 every 2 weeks is better than paying $ 1,000 per month. This is called accelerated payments. In both cases you will spend almost the same amt. each month, but you will pay off faster with bi-weekly than monthly payments.

    5. If you can afford and can go for a lower amortization, you will save a lot interest. Say instead of 25 yr amortization, maybe you can go for 20 yr amortization ??

    6. Know the difference between mortgage TERM and mortgage AMORTIZATION. So you might have a 5 yr term fixed or variable with say 20 yr, 25 yr amortization.

    7. Find how much the PENALTIES are if you BREAK the mtg. Find out what IRD - Interest Rate Differential penalties are. Or if its just a 3 month penalty in case you break the Mtg.

    Also see if the Mtg is PORTABLE and TRANSFERABLE. Say you buy some other smaller or bigger house, maybe yoh just want to port this MTG over to the new house

    8. There are other costs involved too like Property Taxes, Utilities ( Water, Electricity, Heating ), Moving Costs, Lawyer fees, Real Estate agent fees (but usually a buyer is never charged RE fees ), Home Inspection fees, Maintenance fees, House appraisal fees etc. Some are one time costs, some are monthly on going recurring costs. So budget for that also.

    Lot of people forget these closing costs, and just see the price of the house and MTG and get a shock, when they see these CLOSING costs, which can be as high as 1 % - 2 % of the price of the house .

    Home ownership can be rewarding and stressful at the same time. Sometimes renting is better, sometimes ownership is better. See the pros and cons of both. There is a myth that ownership is always better than renting, and renting means you are just throwing money down the drain and have nothing to show for it at the end of the day. Their are advantages and/or disadvantages of both.
    Last edited by tjthemanto; Mon, Jan 25th, 2016 at 04:09 PM.
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    Quote Originally Posted by rtbc View Post
    Scotiabank, Yeah Heard about it . I will consider this as an option. Thanks for your valuable suggestion.
    I just looked it up and it is now called StartRight and you do have to be a Permanent Resident, here is the link: http://www.scotiabank.com/ca/en/0,,914,00.html

    I also saw something similar advertised at CIBC, you might want to try them: https://www.cibc.com/ca/advice-centr...to-canada.html

    I am sure if these do it, there are many other places that do to!
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    Wow. . . I'd like to hire all of you guys as my personal assistants!

    I apologize. I just skimmed all the comments but RTBC, I do agree with TJ. It would be an excellent idea to rent for awhile while you get used to the community you are going to live in. I lived in the Oakville area some years ago and it is a lovely but very expensive place to live. You may find a close/by place that may be more appealing and cheaper. Also (if I were in your place) I would prefer living in a community that had a fair amount of my countrymen as it makes the transition into a new country sooooo much easier.
    I have Indian friends that I adore, but I know they have found it hard being in my community where there are very few of their nationality.

    I personally would avoid any of our "Major" Institutions/Banks because their penalties for breaking a mortgage is very high compared to the Lenders available through Brokers. That would include the Scotia bank or CIBC. I think they were both mentioned.
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    Quote Originally Posted by MortgageQueen View Post
    Wow. . . I'd like to hire all of you guys as my personal assistants!

    I apologize. I just skimmed all the comments but RTBC, I do agree with TJ. It would be an excellent idea to rent for awhile while you get used to the community you are going to live in. I lived in the Oakville area some years ago and it is a lovely but very expensive place to live. You may find a close/by place that may be more appealing and cheaper. Also (if I were in your place) I would prefer living in a community that had a fair amount of my countrymen as it makes the transition into a new country sooooo much easier.
    I have Indian friends that I adore, but I know they have found it hard being in my community where there are very few of their nationality.

    I personally would avoid any of our "Major" Institutions/Banks because their penalties for breaking a mortgage is very high compared to the Lenders available through Brokers. That would include the Scotia bank or CIBC. I think they were both mentioned.
    yup, pretty expensive place to live in. In general they mostly have expensive houses and expensive condos there. Very few rental apartments in Oakville , unlike say Nearby Mississauga, Brampton or even Toronto.

    Plus public transit is not that great in Oakville, so car is pretty much a necessity in Oakville. Toronto has subway/buses and Mississauga, Brampton have decent buses, but Oakville bus schedule is not that great. Mostly you will have to rely on GO train if you want to get into Toronto from Oakville.

    hard and expensive for new comers to get a car, license, insurance in the first year or so. Winter driving also a nightmare for new comers. Usually its better to rent and not have a car for the first year or so. But get the formalities completed like drivers license, bank account, phone, internet etc. Schooling for kids is also a major issue in the first year or so, totally different education system.
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  8. #23
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    One more thing, when your mortgage comes up for renewal, lot of people just go for the original amortization period again ! You need not do that.

    so if the initial mortgage is 5 year term and 25 year amortization. After 5 years are up and it comes for renewal maybe you can just go for a 20 year amortization at renewal, need not go for a 25 year amortization again.

    plus you need not go for the same lender again at the time of renewal, shop around and go for some other lender at the time of renewal, (if they are cheaper). most people just blindly renew with the same lender again as they think they have to go with them and its some kind of obligation and there might be penalties etc.
    Last edited by tjthemanto; Wed, Jan 27th, 2016 at 10:01 AM.

  9. #24
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    Quote Originally Posted by rtbc View Post
    hi,

    I am moving to Ontario, Canada in 1 month. I want to settle in Canada and just got a job there. I am thinking of purchasing a Small Home in Canada but not sure whether i can qualify for a Mortgage or Not. Being a newcomer, is is possible to get mortgage ?

    I have a fair amount for down payment lets say 10-15% around of total home value. Many people recommended me to go to a broker . Is it good to get help from broker?

    Rajwinder Singh
    Welcome to Canada!
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    After a three month job period, you have a chance to get a mortgage. But for this, you have to show proof of good credit. You have to show your credit history to the mortgage lender.
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    I am currently doing a New to Canada mortgage. I just wanted to mention that one other reason to rent is to be sure your job is stable before committing to such a large debt.

    One thing I appreciate about most new immigrants is that they work very hard to save a down payment in a relatively short time, which is very admirable. But it also gives them a chance to develop stability in their employment.
    Just my opinion. . .
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