A myth you can hear “A newcomer cannot obtain any mortgage from any of large Canadian bank if he/she/they don’t have any well-established credit history.” But it is not true. Though trying to buy a home as a newcomer in Canada is quite challenging. The housing marketing in Canada, basically Toronto, Richmond Hill, Aurora or Vancouver generally come as a shock. Along with the process of qualifying for a mortgage can be a hectic for any newcomers. Because the entire process is confusing and complicated.
But once you will be qualified you can able to borrow the new to Canada mortgage at competitive market rates.
If you are new to Canada and need a mortgage to buy your dream house in this beautiful city, then you must have to provide some vital documentation and papers. However, the documents you provide depending on your credit rating and whether you are a permanent resident or not will show which type of mortgage you will get.
If you are a newcomer in Canada and want to purchase a new house, then you have come to the right place. Here in this article, we are going to show all the necessary documents, paperwork and qualifications you need to become applicable for a new space in a new country.
Situations and type of mortgages
Below we are going to show you some unique situations that will outline which type of mortgage you will qualify.
- If you are a permanent resident and your credit score is better, then you may be able to qualify for a typical mortgage.
- But if you are a permanent resident and your credit score is weak then you may be able to pass for a new to Canada mortgage.
- However, if you are a permanent resident and submit a work permit, application for PR and credit rating is better, then you can qualify for a typical mortgage.
- If you are not a permanent resident and credit rating is weak, then you can pass for a new to Canada mortgage.
However, if you are not eligible for any qualification criteria for a typical mortgage, then you can obtain a mortgage from the new Canada program.
Documentations for a new to Canada mortgage
The New to Canada program is one of Canada’s three mortgage default insurance providers that is helping many newcomers to obtain a mortgage to purchase a new home.
However, there are some requirements for all three programs. Here we are going to show you a list to make sure you carry everything you need to submit your application.
1. Build your credit rate
Building your credit rate is the first step to get a mortgage rate in Canada. However, a better credit rating will help you get a mortgage. Over time, it could save you thousands of dollars in time. Below is the list of activities that will help you to build a credit rate.
- Apply for a credit card.
- Use and pay off your credit card every month.
- Pay your bills on time to maintain the rating.
- Apply for small loans and pay off regularly.
- Letter from a financial institute.
2. Credit supporting papers
You have to submit some supporting documents if you are new to Canada and have a weak credit rating. Here are some of the vital paperwork.
- Work permit
- Proof of income
- Several months of bank statements
- International credit report
- Twelve months of rental payments.
- Confirmation letter from the service provider.
Collect all these documents and start your mortgage application process.
If you are a self-employed you need a two years of work experience in Canada, though it may take time to get a mortgage from any lender. But, when you are salaried, your challenges to obtain mortgage will be less. Your lender will inspect that you have served at least three months to the company before applying any mortgage.
3. Save down payment
Saving your down payment is also a better decision. However, you have to put down at least 5% of the purchase price, if you are new to Canada and have permanent resident status. On the other hand, you need to put down 10% if you are a non-permanent resident.
4. Calculate mortgage default insurance premium
If you decide to put down 20% of the purchase price, then you would be taking on a high ratio mortgage. And it requires mortgage default insurance that protects the lender.
5. Select a mortgage provider
You can get a mortgage from a lender, or you can work with a mortgage broker in Canada. They will shop around for the best price and negotiate on your behalf for better results.
So here is the complete information about the documentation you need during, purchasing your dream house in Canada. Gather all the vital papers and become eligible for a new to Canada mortgage.