If you’re new to Canada, I would first like to say hello and welcome to your new home. It’s more than likely much, much colder than you’re used to, especially here in Edmonton, but this is a truly wonderful country. That being said, if you’re new to Canada and wanting to buy real estate, you may be surprised at the differences here compared to what you may be used to. Here are some handy guidelines for people new to Canada, like yourself, who want to buy a home and get a mortgage.
If you are not a citizen of Canada, the documents on which you are here will affect what kind of mortgage you can get, and if you can get one at all.
For those of you on a valid work permit (ie. your employer sponsored you to come and work in Canada), then you are available for New to Canada programs. Most significantly, you may only require a five percent down payment as long as you meet the other credit qualifications and have been here for less than five years. This may impact your overall interest rates, but it is a handy exception for those who spent their money getting here. Be aware that the down payment must be from your own savings. Money from lenders or as gifts from family do not count towards this money, it has to be entirely your own.
If you are a landed immigrant, then you are subject to many of the same programs as those with work permits: if you’ve been here for less than five years, you still only need five percent for a down payment. You will still need to meet the other credit qualifications, but the exception is still there for you. That money must still come from you, not a lender or a gift..
When you become a permanent resident, you can take full advantage of the five percent down payment exception, but you can enjoy a little more flexibility. The five percent, for example, doesn’t have to come from your savings, it can be gifted to you or come from a lender. You still have to do apply for this program within the same five year window as everyone else. Canadian debt may impact your mortgage as well when you’re a permanent resident. If you have two years worth of Canadian debt on your credit report, you may not qualify for the New to Canada program.
Coming to Canada is a great thing and we have programs in place to make home ownership on our newest residents. If you’re interested in making a purchase in the Canadian real estate markets, be sure to contact mortgage professionals who can help you take advantage of all the right programs. Getting this done before the five year window is especially important, so be sure to act fast.