*** This article was originally written in 2014 and the rules for financing have changed significantly. Please contact us if you have any questions about mortgage financing****
Are you moving to Mississauga or anywhere else from the GTA from outside of Canada? Are you researching the rules on mortgage financing for newcomers to Canada?
Buying a home is a complicated process and if you are coming from outside of Canada it is even more so. It isn’t as simple as seeing a house and buying it and if you are new to Canada, the information you will read about on the internet will most likely not apply to you. Having worked with many newcomers to Canada, I thought I would touch on two of the most common misperceptions out there and give you a good idea of what to expect.
Myth #1. Everyone qualifies for 5% down.
For Canadian residents who qualify, the minimum downpayment that you are allowed to buy a home with is 5%. Typically, to be qualified for this type of mortgage you will need to provide proof of income, funds, steady employment, have good credit and be able to show a lender that you are here for the long haul. For new people arriving to Canada, you will need time to build up a good credit rating, get a job and be in that job for long enough that lenders consider you financially stable. Typically when someone contacts me about purchasing a home the FIRST thing I do is set them up for a pre approval with a lender right away. What almost always happens is that if they can qualify, it is with a 35% downpayment.
Myth #2. Every lender offers the same rates, and every borrower gets them.
The low rates you are seeing on the internet are the best rates available from the top lenders. These lenders have the strictest standards and if you can’t meet them, then your only other option is to go to a lower tier lender who will charge a much higher interest rates to cover the risk.
These are just two misunderstood facts about mortgage financing for newcomers to Canada. There are many other factors that lenders consider including where the funds for the downpayment are coming from, how long they have been in Canada and what was your financial situation and credit score like in your country of origin. If you are new to Canada be prepared for a long process.
The best advice I can offer you is to get in contact with a good realtor who understands the process, and get pre approved for a mortgage before you arrive in Canada, that way you will be ready to settled right away. If you have any questions about mortgage financing for newcomers to Canada, or any real estate questions about Mississauga or the west GTA feel free to contact me. I’m avalable by phone, email or skype.
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