Welcome to our First-Time Homebuyer Blog Series. We’ve compiled answers to frequently asked homebuyer questions to help you understand the many variables associated with buying your first home. It’s our job to make this process as enjoyable and stress-free as possible for you!
es! If you’ve relocated or immigrated to Canada within the past five years, there are some great mortgage financing options available to help you become a homeowner.
You may even be able to buy a property with as little as a 5% down payment under a New to Canada mortgage program.
If the property’s value is under $500,000, you can make a purchase for just 5% down. But, if you’re buying a more expensive home – up to a million dollars – you’ll be required to pay 5% down up to $500,000, with an additional 10% down payment on the portion of the home value above $500,000.
What’s involved in mortgage qualification?
here are a number of items your mortgage broker or lender will have to review to ensure a New to Canada program will work for you.
When it comes to income and employment, you must have a minimum three months of full-time employment in Canada. But, if you’re being transferred under a corporate relocation program, you’re exempt from this rule.
And, depending on how much you’ll be borrowing for your mortgage in relation to the total cost of the property – your loan to value (LTV) – you must also provide specific credit documentation.
ere are the typical credit requirements
- Borrowing 90.01-95% LTV
a) International credit report (Equifax or TransUnion) demonstrating a strong credit profile OR
b) Two alternative sources of credit demonstrating timely payments (no arrears) for the past 12 months. The two alternative sources required are: Rental payment history plus one other alternative source (hydro/utilities, telephone, cable, cell phone and auto insurance)
2. Up to 90% LTV
a) Letter of reference from a recognized financial institution OR
b) Six months of bank statements from a primary account
ou may use traditional sources for your down payment including personal savings, a non-repayable gift from an immediate family member(s) and proceeds from the sale of your property.
f you’re borrowing 95% of your purchase price, the down payment must be from your own resources. But, if you’re borrowing less than 95%, anything above the first 5% of the down payment may be gifted from an immediate family member(s) or come in via a corporate subsidy.
re you new to Canada and have questions about buying your first home? Answers are just a call or email away!