New to Canada Borrowers

New Canadian Mortgage Eligibility

When you are new to Canada, before you can be eligible for a mortgage, you need to be employed for at least three months, as that is the typical probationary period under the employment standards act.  If you have credit reports or bank references from your home country, this also help lenders when assessing your repayment history and credit, it will help you strengthen your mortgage loan application.

Since you’re new to Canada you won’t have Canadian credit history, as such, you need to start building and/or creating some, and your first step should be to apply for a credit card.  If you can get approved for traditional credit, then try to get secured credit. With secured credit you’d pay the creditor upfront and once you’ve showed them you always pay on time for a minimum of one year, you’ll get the security payment back.

It can be hard to establish credit in Canada, lenders do recognize this.  Therefore, they’re also willing to accept letters from your landlord or copies of utility bills, essentially, lenders want to see that you have consistently paid your expenses on time for a 12-month period. However, after three years you’ll no longer be considered a “new immigrant,” so after this point lenders won’t be as flexible.

Work Visas & Employed Landed Immigrants

If you’re in Canada on a work visa, or you’re landed and working for at least three months, you can get financing of up to 95 percent providing you can provide the required proof of strong credit and on time payments.

Non-Landed Immigrants (who are employed)

If you are not a landed immigrant in Canada, but you have been employed in Canada for at least three months and you meet the credit guidelines, you can also get financing of up to 90 percent.  However, this financing only covers purchases not refinancing.  Note that you should be in the process of applying for Canadian landed status, the lender will check.

Non-Working New immigrants (without landed status)

If you don’t have landed status, and are not employed in Canada, you’d only be eligible for financing between 65 and 75 percent of the property value.  You must have a very strong credit history and be able to show lenders that you have assets which you can liquidate.  The liquidation amount must be able to cover six months of payments on the mortgage you are requesting, the mortgage interest, and your property taxes.

Keep in mind that these are just some basic guidelines to help you in applying for your first mortgage in Canada.  So before you consider applying, call me to discuss your specific situation and to get a pre-approval.

Call me any time.