Are you a newcomer to Canada dreaming of buying a home and establishing your new life in the Great White North? At Concourse Mortgage Group, we understand that securing a mortgage as a newcomer can be a challenging and exciting journey. That’s why we are dedicated to helping you navigate the process and achieve your homeownership goals with our New to Canada lending programs.
In this comprehensive guide, we will explore everything you need to know about obtaining a mortgage as a newcomer to Canada, including eligibility requirements, types of mortgages, interest rates, and much more.
New to Canada Mortgage: A Helping Hand
As a mortgage broker in Calgary, Alberta, we specialize in assisting newcomers to Canada in securing the right mortgage for their needs. We understand that the transition to a new country is filled with opportunities and challenges, and we are here to simplify one of the most significant steps: buying a home. With access to over 30 lending institutions including banks, credit unions, trust companies and monoline lenders, we have multiple lenders that have New to Canada programs designed specifically for you.
Eligibility Requirements
To be eligible for our New to Canada mortgage programs, you typically need:
1. A Valid Work Permit: You will generally need a valid work permit to be eligible for a mortgage. To be exempt from the current Foreign Buyer Ban, there must be a minimum of 183 days remaining on your work permit. Your employment history and work permit status are vital factors that lenders consider.
2. Permanent Residence Status: While having permanent residence status can enhance your mortgage prospects, it’s not always a strict requirement.
3. Credit Score: Building a credit history in Canada is crucial. If you have a credit history in your home country, it can be beneficial. However, even without a Canadian credit history, it’s possible to obtain a mortgage. We will discuss “alternative sources of credit” with you. You’ll either need to have no credit score in Canada, or one that’s above 600. It seems strange, but we can explain why, and how to get there.
4. Loan Amount: The amount you can borrow will depend on various factors, including your income, creditworthiness, and the lender’s policies.
5. Employment History: Lenders typically look for a stable employment history when assessing your mortgage application.
Types of Mortgages for Newcomers
There are several mortgage options available for newcomers, just like for Canadian citizens. Some of the common types include:
1. Fixed-Rate Mortgage: This mortgage offers a stable interest rate throughout the term, making it easier to budget for your mortgage payments.
2. Variable-Rate Mortgage: With this option, the interest rate can fluctuate with market conditions. It can offer lower initial rates but comes with potential changes in your monthly payments.
3. Open Mortgage: An open mortgage allows you to make prepayments without penalties. This can be ideal for those who plan to pay off their mortgage sooner.
4. Closed Mortgage: A closed mortgage typically comes with lower interest rates but fewer prepayment options. It can be a good choice if you don’t plan to pay off your mortgage early. The majority of mortgages in Canada are closed mortgages, and contrary to popular belief, most variable rate mortgages are closed.
Interest Rates and Mortgage Rates
Interest rates are a critical aspect of obtaining a mortgage, and they can significantly impact your monthly payments. The mortgage rates offered to newcomers can vary, and working with a mortgage broker can help you find competitive rates that suit your financial situation. Our mortgage professionals are well-equipped to negotiate on your behalf and find the best possible rates. It is important (and encouraging) to note that New to Canada programs still give you access to some of the best interest rates in the industry.
Pre-Approval: A Smart Move
Before you start house hunting, getting pre-approved for a mortgage is a wise step. Pre-approval gives you a clear idea of how much you can afford and makes you a more attractive buyer to sellers. It is a simple process that involves providing some basic financial information to a lender. Once you’re pre-approved, you can confidently search for your new home within your budget. Your Concourse Mortgage Broker will ensure you are fully prepared for the process.
Mortgage Default Insurance
In Canada, if your down payment is less than 20% of the purchase price, you’ll need mortgage default insurance. This insurance protects the lender in case you default on your mortgage. As a newcomer, understanding the requirements for mortgage default insurance is crucial. Our team can guide you through this process and help you find the best solution.
Working with a Mortgage Broker
Working with a mortgage broker like Concourse Mortgage Group can be incredibly beneficial, especially for newcomers to Canada. Here are some advantages of partnering with a mortgage broker:
1. Access to Multiple Lenders: We have connections with various financial institutions, which means we can help you explore a wide range of mortgage options and interest rates to find the best fit for your needs.
2. Expertise and Guidance: Our mortgage professionals have in-depth knowledge of the mortgage market and can provide you with expert guidance throughout the process.
3. Negotiation Skills: We are skilled negotiators and can help you secure the most favourable terms for your mortgage.
4. Simplified Process: We’ll simplify the mortgage application process, ensuring that you understand every step and requirement along the way. We want our clients to feel they were educated along the way, therefore also feeling empowered in the decision making.
Building Credit in Canada
As a newcomer, building a credit history in Canada is essential. A good credit score will not only help you obtain a mortgage but can also affect other aspects of your financial life, such as getting a credit card or loan. Our team can provide advice on how to build and maintain a healthy credit score in Canada.
Making Mortgage Payments
Understanding how mortgage payments work in Canada is crucial for financial planning. Your monthly mortgage payments will typically consist of the following components:
1. Principal Payment: This is the amount you’re paying toward the loan balance.
2. Interest Payment: The interest is the cost of borrowing the money, and it’s based on your interest rate.
3. Property Taxes: Property taxes vary by location and are often included in your monthly payments.
4. Homeowners Insurance: Home insurance provides coverage for your property, and it’s typically included in your monthly expenses.
New to Canada Mortgage: Your Path to Homeownership
At Concourse Mortgage Group, we are dedicated to helping newcomers to Canada achieve their dream of homeownership. Our New to Canada lending programs are designed to assist you in navigating the Canadian mortgage market with ease. Whether you’re a newcomer with a work permit, permanent residence status, or a unique financial situation, our team of experienced mortgage professionals is here to support you every step of the way.
If you’re a newcomer to Canada and want to obtain a mortgage to buy your dream home, don’t hesitate to reach out to us. We’re here to answer your questions, provide expert advice, and help you secure a mortgage that aligns with your goals. Helping our clients realize their dreams of home ownership is truly one of the most rewarding parts of our jobs. We don’t take it for granted, and we think you’ll see that.
Let us be your trusted partner on your homeownership journey in Canada. Contact Concourse Mortgage Group today, and let’s turn your dream of homeownership into a reality.
403-300-2773
Walk-in – come see us at 138 Mahogany Plaza SE. We’re in office from 8:30-4:30 Monday-Friday, unless out meeting clients.