You must meet various criteria to be considered a newcomer, you must:
- Live legally in Canada and therefore have either permanent or non-permanent status, but also have a valid work permit.
- Be able to justify a full-time job in Canada for at least 3 months.
- Have resided in Canada for less than 5 years. If you have immigrated for a longer period of time, you are no longer a new immigrant.
As a newcomer, banking institutions require certain documents to determine your creditworthiness. These include:
- a document proving that you are a non-permanent resident or a permanent resident (PR card);
- a valid work permit;
- proof of income such as an employment contract.
Banks may also require a newcomer with a recent credit record (little history):
- bank statements;
- documents proving the rental of a dwelling for one year;
- a letter of reference issued by a recognized bank.
- documentation of regular savings for one year.
The process of applying for a mortgage differs from country to country. A mortgage broker is the best person to inform you about the steps required to apply for a mortgage in Canada. Thanks to their in-depth knowledge of the market, these professionals are in the best position to guide you towards the most suitable financing products for your situation. He or she can also advise you on the best way to save for the down payment required to obtain a mortgage loan in Canada. A Multi-Prêts Mortgage Broker can also help you get pre-approved for a mortgage. This process allows you to know the maximum capital you can borrow for the mortgage.
Banks will never finance 100% of the purchase price of a property. They require a down payment, even for newcomers. The down payment must be at least 20%, but to facilitate access to housing, financial institutions may accept a lower down payment, provided that the subscriber takes out mortgage insurance with CMHC, Canada Guaranty or SAGEM. The minimum down payment required is not the same:
- for non-permanent residents, it amounts to at least 10%;
- for permanent residents, it must be at least 5%.
The amortization period is defined as the length of time it takes to pay off the mortgage. In most cases, banks will allow a maximum loan term of 25 years. However, if the borrower has at least a 20% down payment, they are more than willing to extend the amortization period to 30 years. S f the mortgage payment is lower, you will have more monthly payments to make.
The program allowing newcomers to access a mortgage loan offered by CMHC, Canada Guaranty or SAGEM is available:
- Permanent residents with a low credit history and score and a minimum down payment of 5%.
- Non-permanent residents with a low credit history , but a minimum down payment of 10%. A lower down payment does not qualify.
To find out whether or not you are eligible for the programs offered by these three Canadian institutions , contact our brokers via the form on our website.
In order to access a mortgage loan, it is advisable to:
- First of all, define the maximum purchase price you can afford.
- Build a down payment.
- Improve credit rating.
- Store around to find the best mortgage offer for your situation.
- Obtain a mortgage pre-approval.
- Proceed to the search of a property, alone or with the intervention of a broker real estate.
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