Buying house in Canada

Hi folks,

I have My PR and planning to move in few months. I have a question about real estate to all the folks who have moved from US to Canada and now understand the real estate scenario there. Specifically few questions

  1. Without credit history when you arrive how easy is it to get a mortgage in Canada?
  2. If you have purchased a house, how long did it take you to build enough credit history to qualify for a decent mortgage?
  3. What are some easy steps you did to start building credit history
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Apply for New immigrants bank account and take a free credit card with it to start history… Almost all banks offer that…
Or you can use Amex Global transfer to get amex credit card based on your US history from them…

Remaining questions about mortgage and requirement of credit history to qualify, I think the other experts can answer.

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Credit history is just like in the US. Get a credit card as soon as you move here and keep using it. Easiest way to build credit history, I was recommended atleast 6 months of history by the bank before looking at a mortgage. This is a reasonable timeline, given that most people rent for a few months before figuring out what they want to purchase - a house is a considerable investment. If you work in tech, you are likely to have a high household income for your city which will definitely help your case.

We purchased a home last fall and I’ll share some details that might give folks an idea of what to expect. When we purchased our home, we hadn’t filed any taxes in Canada and that did make it harder to get a mortgage for sure.

Around July/August I’d gone to the Mortgage Specialist at my local credit union to get a pre-approval so as to understand what sort of a home we could afford. After reviewing our situation, he said that the credit union couldn’t extend me a mortgage due to lack of Tax information.

We shelved our search for a couple of months and were then recommended to a mortgage broker by an acquaintance who had purchased a home recently. The mortgage broker told us that we’d either need to have a Notice Of Assessment for the previous year or we could qualify via the new to Canada program that most banks and some mortgage lenders have.

We decided to go for the new to Canada program, the main catch with this is that they don’t check your Canadian Credit history but ask for a 35% down payment. They also verify your employment and asked us for our US credit history. We were able to get a mortgage with RMG Mortgages, we chose a variable rate mortgage (recommended by our broker) which is currently at 1.69%.

The process moved fairly swiftly after we placed an offer on a property and the commitment letter from the mortgage company came within a week. The did more checks a week prior to closing and our mortgage was funded timely.

My recommendation to anyone in the same position would be to find a good local mortgage broker, they can really help navigating the paperwork and in finding the best deal. You can always compare what rates they offer with your own banks but any mortgage broker worth their salt will get you significantly better deals than the posted rates at any of the major banks.

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It seems somebody gave you half information…

New to canada program does not always need 35% down payment… With new to canada program downpayment can be as little as 5%,
But,you should have full time job for atleast last 3 months… so new to canada program does not need notice of assessment… and thats why they do income verification as bank’s money is at bigger stake…

Now 35% downpayment needs no income verification … even if you are not working still you can take a mortgage with 35% downpayment… because bank’s stake is less and they know you can afford it better if you can give 35% downpayment…

Hope it makes things clear… I had enquired all this myself with multiple bank mortgage specialist…

For proof, my friend got it 3 months ago with 35% downpayment and he didn’t work anywhere… and he came newly to Canada 6months ago from Dubai.

Again this may very from bank to bank or lender to lender…

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“New to Canada program” - a great piece of information and I was not aware of this. Do we need to pay any mortgage insurance under this program? Thanks

Mortgage insurance has nothing to do with “new to canada program” or “old to canada”…

If down payment is less than 20%, then insured mortgage is required… Otherwise for 20% or more downpayment, you don’t need insured mortgage,…

Btw “new to canada” means upto last 5 years in most banks…

It looks like you still have to pay under the new to Canada program as premium even if you do >= 20% down payment

Premium Rate:

LTV Ratio Premium Rate Top-Up Premium
Up to 65% 0.60% 0.60%
65.01% - 75% 1.70% 5.90%
75.01% - 80% 2.40% 6.05%
80.01% - 85% 2.80% 6.20%
85.01% - 90% 3.10% 6.25%
90.01% - 95% 4.00% 6.30%

First of all, Let me tell you there are 3 different insurers here, and you pasted one of them…

Secondly, I think what Sagen is saying that if you opt to go through them even for downpayment more than 20% then they charge that premium in the table you pasted…

But you are checking at wrong place… Instead of asking insurer, You should check with the bank directly about it…

Because it is bank… If bank is not sending your deal to insurer for downpayment >= 20% then how would insurer charge the premium on your deal?

AFAIK, Deals for >= 20% are called Uninsured deals, and < 20% are called insured deals…
Still, bank can ask your deal to through insurer even for >=20% in certain cases when bank wants to and when banks finds the deal risky…

Thanks for the info.
Do you mind to share the price of your property, Location ?