Transcript of Video Blog:
Hey everybody, Rowan Smith with the Mortgage Centre. I’m going to talk right now about new immigrant mortgages. There’s a lot of confusion out there because there’s really two types of programs. First type of a program is one where a person can document their income here in Canada, they have a job and they’ve established credit. They may have been here for a couple of years. Second type of person is very new to the country, who maybe doesn’t have permanent long term employment and doesn’t have a credit rating here in Canada.
So if you have the credit rating and the job, well, then you fit the requirements of CMHC and the other insurers, they’ll let you put as little as five percent down. It has to be from your own sources, for the most part. There are exceptions. It has to be money that you’ve brought with you from your home country and can prove that it is, in fact, yours and you’re going to have to have a job that can service the debt, just like any other Canadian buying. So if you are a new immigrant, yes, you can buy with as little as five percent down.
But! Many times people come from another country, they’re not in that situation. Maybe they’ve run a business back home that’s a big source of their income and it hasn’t quite been set up here in Canada just yet. If that’s the type of situation we’re talking about, where they have no established credit, the banks are generally going to want to see between 35% and 25% down payment.
So if the place is 1,000,000 bucks, you’re going to have to put $250,000 to $350,000 down payment on the property in order to get a mortgage on it. Well, it may seem like a lot but it is because the bank cannot rely on any sort of credit repayment history or whatnot that you have. Some of them will ask for a banker’s reference letter from back home.
Now I say 25 to 35, you may say: “Well, my bank is telling me I can do it with 35 but not 25 or 30. Why not?” Well, there are a few programs out there but what they require is: if you’re going to put 25% down and not being asked to properly document your income and not have a credit rating in Canada, they want to see an additional 25% of the purchase price in cash, verifiable cash assets worldwide.
So if you’re buying a million dollar home, you want to put $250,000 down, you can do that. If you can’t verify your income and if you don’t have a great credit rating but you’re going to have to show another $250,000 of liquid assets somewhere else in the world, in another bank account or another country or what have you.
So if you know anybody in these situations, new immigrants that don’t have credit, don’t have great employment yet or new immigrants that have been here for a couple of years and do have jobs, either way we can help them. From the Mortgage Centre, I’m Rowan Smith.