New to Canada – New Immigrant Mortgages in Canada

NEWCOMERS & IMMIGRANT MORTGAGES

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New to Canada and Looking to Buy a Home

It’s quite often that we receive calls from prospecting clients who are new to Saskatoon, Saskatchewan and Canada and wish to buy a home for their family. In the mortgage industry, lenders have different programs and will look for different specifications for each client. However; the real power of approval for new immigrant mortgages in Canada is through the mortgage insurers. These insurers are CMHC, Genworth, and Canada Guaranty. Included below are various insurer guidelines. Once we can meet their requirements, we are able to obtain the best rates available and terms for your new mortgage.

Summary of the credit and down payment requirements for new immigrant mortgages in Canada:

 

 

Permanent Residency with 5% down payment:

  • 12 months of bank statements from a Canadian bank account showing regular rental payments and one other payment

OR

  • Credit bureau report from your current country

OR

  • Bank reference letter from your current country  (Credit bureau is preferred)
  • Down payment source must be from your own personal savings or investments
  • Income verified via employment letter confirming your position is permanent and your income amount in addition to a recent pay stub.

Work Visa with 10% down payment:

  • Bank reference letter from your current country  (Credit bureau is preferred)

OR

  • Credit bureau report from your current country
  • Down payment source must be from your own personal savings or investments
  • Income verified via employment letter confirming your position is permanent and your income amount in addition to a recent pay stub.

Permanent Residency with 10% down payment:

  • 6 months of bank statements from a Canadian bank account showing regular rental payments and one other payment.

OR

  • Credit bureau report from your current country

OR

  • Bank reference letter from your current country  (Credit bureau is preferred)
  • Down payment source must be from your own personal savings or investments
  • Income verified via employment letter confirming your position is permanent and your income amount in addition to a recent pay stub.

We want to work with you and our lenders to ensure you receive the best rates and terms available for your new home purchase.  As experts in new immigrant mortgages in Canada, our goal is to ensure your new home purchase is enjoyable, clear, and professional.

The Importance of Financing Conditions

 

So you’ve found the condo or house of your dreams and you want to make an offerThe Agreement of Purchase and Sale is the official document that includes the terms and conditions of your offer. Do you need a financing condition?
condition is defined as “a requirement that is fundamental to the very existence of the offer.” A breach of a condition allows the Buyer to get out of the contract and obtain the full amount of the deposit back. There are limitless types of conditions that might be included in an AP&S; one of the most important one to understand is the Financing Condition.
The financing condition protects a Buyer. While the legal wording of the clause may vary, it essentially tells a Seller that your offer to buy their property is conditional on you obtaining financing. A well-worded financing clause will state that the financing you obtain must be “satisfactory to the Buyer in their sole and absolute discretion;” meaning that the terms and conditions of the financing obtained (interest rate, payments, etc.) must be satisfactory to you – not just that you were able to obtain financing from someone at some imaginary rate.
If you buy a property without a financing condition and then realize that you can’t find a lender to lend you the money, you’ve got trouble. Or maybe you find out your credit isn’t as good as you thought it was and the bank is penalizing you by charging you a higher interest rate and you can no longer afford the mortgage payments. A financing condition can protect you from losing your deposit and being sued, by giving you an ‘out’ if you need it. Of course if your offer is conditional on financing, you have a duty to seek financing in good faith (meaning you can’t just change your mind about the house the next day and back out of the deal saying you couldn’t get financing).
Mortgage Pre-qualification vs. Pre-approval
People often mistake being pre-qualified for a mortgage for being pre-approved for a mortgage. Being pre-qualified means that a lender has determined how much mortgage you can afford by looking at how much money you make and what your debts are and applying their fancy ratios. They have not likely confirmed what you’ve told them (with credit checks and employment confirmation letters), nor have they guaranteed you an interest rate or mortgage terms.
Mortgage pre-approvals are in writing – so if you don’t have something in writing (probably valid for 120 days), then you aren’t actually pre-approved. Having a financing condition in your offer gives you the opportunity to confirm everything with your lender and is one of the most important ways of protecting yourself.
These days, banks are often looking to approve people for a mortgage for a particular house – they want to know that the home they are purchasing with you is worth what you paid.  They may order an independent appraisal of the house and will lend you money based on that appraisal. Again, a financing condition can protect you.
Financing conditions generally last for 3-5 days, giving you time to sort out your finances. At the end of that time period, you’ll be asked to sign a ‘waiver’ or ‘fulfilment of condition’ and your offer will no longer be dependent on your financial situation.
If you find yourself in a bidding war or some other high-pressure negotiation where financing conditions aren’t likely to be accepted by the Seller, there are ways of being fully approved by your lender BEFORE you make an offer, thus enabling you to make an offer without a financing condition. A good Realtor and lender can guide you through this process.

What do I need to apply for a Mortgage in Saskatoon?

 

If you are planning to get a mortgage in the near future, it is best to be prepared.  Being prepared and having the right documents and information ready to present to your Mortgage Associate when you first meet can save tons of time, speed up the process and make things go smoothly.
The following is a summary of what lenders require depending on what type of job you have, keep in mind, we may need more information depending on your circumstance:
Salaried Employees
• Job Letter – Confirmation of your employment needs to be on company letterhead, signed by the appropriate individual confirming the position being held and your wage. If you are a recent hire, the job letter should confirm that probation period has been passed. Bonuses, car allowances and other forms of remuneration should be mentioned if applicable.
• Paystubs – Most recent paystub that shows your year-to-date earnings.
Hourly Employees
• Job Letter – Verification is made on company letterhead, signed by the appropriate individual confirming the position being held and wage. If you are a recent hire, the job letter should confirm that probation period has been passed. Bonuses, car allowances and other forms of remuneration should be mentioned if applicable.
• Paystubs – Most recent paystub that shows your year-to-date earnings.
• T4’s
Commission Income 

• T4’s and/or Personal Tax Returns (T1 Generals) from the current year and the previous year.
• Job Letter – Verification is made on company letterhead, signed by the appropriate individual confirming the position being held and wage. If you are a recent hire, the job letter should confirm that probation period has been passed. Bonuses, car allowances and other forms of remuneration should be mentioned if applicable.
Self Employed 

• Financial Statements
• Notice of Assessments (NOA) – to confirm no taxes owing.
• Personal Tax Returns (T1 Generals) from the current year and the previous year.
There are 4 main factors to qualify for a mortgage; stable income, a good credit history, making a sound choice on the property you are purchasing and how much (if any) of a down payment you have.
 
• Stable Income:  most lenders will require a Letter of Employment confirmation as well as 2 recent paystubs. They may also need the last 2 years of NOA’s (Notice of Assessments).
• Credit History: is a piece of information that is always reviewed by the lenders. We always pull a credit history when you apply for a mortgage or seek a preapproval so that we can determine which programs will best suit your situation.
• Property: choices also impact the mortgage qualifying process, as the real estate is the lender’s security – if for some reason – you are unable to repay the mortgage.
• Down Payment: are not always required as there are mortgage programs that provide cash back incentives for qualified purchasers. If you have no down payment, you generally will still need to have some cash to put down for your real estate purchase deposit and for closing costs
If you have any questions, please give our office a call! (306) 244-7755!