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

[rtbc]

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

[dougboswell]

There are lenders that have new to Canada programs. However there are qualifications. One that is common is that you must be employed. For 1 large bank it is 3 months while another lender requires at least 2 years employment with the same company. Your best option is to move here and get a job. Along the way you will need to establish credit as a lender needs to see a credit history. This will give you a chance to talk to those lenders that have this program and save more money for a purchase. In Ont you also have to pay a land transfer tax at closing so more money is required. In Toronto there are 2 land transfer taxes.

[Durham Couponer]

Do you have a neighborhood in mind yet? If not, I'd work for a bit and rent. Most major banks will match the lower online mortgage rates so you might not need as broker.

[MortgageQueen]

Further to Doug's comments, if you decide to try to buy a home after just 3 months employment, you will also be required to produce some acceptable proof of good credit. Usually lenders prefer an international credit report, but sometimes they will accept a letter from your (major)bank where you came from vouching for your credit worthiness.

I agree with Durham Couponer that it would probably be wise to take a year and rent. When you get here, you can apply for some credit but also save your paid receipts for your bills such as cell phone, cable, etc. Once you've been here a while, you can also establish your credit that way (for Newcomers to Canada Program)

I currently have foreign clients from Dubai buying investment property. As foreigners with no employment and no credit in Canada, they will have to pay 20- 25% downpayment PLUS fees AND pay 6.99 to 7.99% interest rate. I'm sure you don't want to do that. Best to save that money and put it towards your downpayment in a year's time.

Also to consider, is the higher the down payment you make, the less mortgage insurance (CMHC) you will have to pay.. . another savings if you wait a year.

[Colsgirl]

We got a mortgage when we first arrived in Canada through the welcome to Canada scheme that some bank have (we used Scotiabank) we had no credit rating and we didn't even have jobs at the time. But we had enough $$ to put down a sizeable deposit and savings to show that we could meet the repayments. We also obtained our UK credit reports and the bank was quite happy to accept those, we also provided copies of our UK bank statements. We had an interest rate that was comparable at the time (if I remember rightly 4% in 2006). We did use a mortgage broker at the time and he was priceless as he did all the legwork for us. He put the application through and we were approved the same day, he said it was one of the least complicated mortgage applications he had done!

[Darth Penguin]

When we moved here in 2000, we couldn't get a mortgage as we were on a worker's visa. You needed to be PR to get one..It may have changed since then, though.

[rtbc]

There are lenders that have new to Canada programs. However there are qualifications. One that is common is that you must be employed. For 1 large bank it is 3 months while another lender requires at least 2 years employment with the same company. Your best option is to move here and get a job. Along the way you will need to establish credit as a lender needs to see a credit history. This will give you a chance to talk to those lenders that have this program and save more money for a purchase. In Ont you also have to pay a land transfer tax at closing so more money is required. In Toronto there are 2 land transfer taxes.

Thanks For suggestion Doug.

[rtbc]

When we moved here in 2000, we couldn't get a mortgage as we were on a worker's visa. You needed to be PR to get one..It may have changed since then, though.

Darth,

I have Heard about that people working on work visa can also get Mortgage in Canada.

[rtbc]

We got a mortgage when we first arrived in Canada through the welcome to Canada scheme that some bank have (we used Scotiabank) we had no credit rating and we didn't even have jobs at the time. But we had enough $$ to put down a sizeable deposit and savings to show that we could meet the repayments. We also obtained our UK credit reports and the bank was quite happy to accept those, we also provided copies of our UK bank statements. We had an interest rate that was comparable at the time (if I remember rightly 4% in 2006). We did use a mortgage broker at the time and he was priceless as he did all the legwork for us. He put the application through and we were approved the same day, he said it was one of the least complicated mortgage applications he had done!

Scotiabank, Yeah Heard about it . I will consider this as an option. Thanks for your valuable suggestion.

[rtbc]

Further to Doug's comments, if you decide to try to buy a home after just 3 months employment, you will also be required to produce some acceptable proof of good credit. Usually lenders prefer an international credit report, but sometimes they will accept a letter from your (major)bank where you came from vouching for your credit worthiness.

I agree with Durham Couponer that it would probably be wise to take a year and rent. When you get here, you can apply for some credit but also save your paid receipts for your bills such as cell phone, cable, etc. Once you've been here a while, you can also establish your credit that way (for Newcomers to Canada Program)

I currently have foreign clients from Dubai buying investment property. As foreigners with no employment and no credit in Canada, they will have to pay 20- 25% downpayment PLUS fees AND pay 6.99 to 7.99% interest rate. I'm sure you don't want to do that. Best to save that money and put it towards your downpayment in a year's time.

Also to consider, is the higher the down payment you make, the less mortgage insurance (CMHC) you will have to pay.. . another savings if you wait a year.

International credit report ? Did you means my home country bank statement report and credit history , right?

I have good credit report in my home country (INDIA).

[rtbc]

Many friends and relatives suggested me to seek a mortgage broker , they told a broker can help me get the right deal and also do it in a hassle free way.

Also few of my relatives recommending me to consult with a mortgage broker company brevity capital. They said the broker is a good one . But i am not sure for now so If anyone had any experience with this broker, please do share . This is their website www.brevitycapital.com

Also if you guys have any broker / lender suggestion which can provide me in reasonable rates , do share. i will try.

My would be location : Oakville, Ontario, Canada

[tjthemanto]

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

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.

[tjthemanto]

https://www.ratesupermarket.ca/

compare rates here

[tjthemanto]

Many friends and relatives suggested me to seek a mortgage broker , they told a broker can help me get the right deal and also do it in a hassle free way.

Also few of my relatives recommending me to consult with a mortgage broker company brevity capital. They said the broker is a good one . But i am not sure for now so If anyone had any experience with this broker, please do share . This is their website www.brevitycapital.com

Also if you guys have any broker / lender suggestion which can provide me in reasonable rates , do share. i will try.

My would be location : Oakville, Ontario, Canada

Might be just an AD for them

[dougboswell]

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.

There is one problem for some applicants applying for a variable. In order to be approved for a variable the interest rate used to calculate the ratios has to be the Bank of Canada benchmark rate which today is
4.64% Depending on the total income and debt load some will not qualify. They would be forced to go with a 5 year fixed which today is around 2.67% on average. The benchmark rate has to be used on 1-4 year fixed terms also.