Mortgage Loans for Newcomers to Canada: How To

How to Get a Mortgage Loan for Newcomers to Canada - Infographic

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If you are new to Canada, you might be wondering what kinds of steps you need to take in order to realize the dream of homeownership. The steps you need to take and the documentation you need to provide depend on things like your residency status, your credit rating, and the down payment you can provide. In fact, you can even obtain a poor credit mortgage if you are new to the country.

Applying For and Obtaining a Typical Mortgage

Many people who are new to Canada believe that they will not qualify for a traditional mortgage, but this is often not the case. Canadian financers are much more lenient than in other parts of the world, and a credit score considered poor in one country might actually be a "fair" score in Canada. For this reason, you should always speak to your primary bank before you search for private home loans. If you can qualify for a typical mortgage, you can save money over time with lower interest rates.

New to Canada Programs

There are three mortgage insurance providers throughout Canada, and each one offers its own version of the New to Canada program, which helps newcomers obtain funding to buy homes. They all have similar requirements, such as a solid credit history with a score of about 600 or more, a down payment of roughly 10% of the value of the loan, and supporting credit documentation. In fact, even if you have weak credit and you are not yet a permanent resident, you can still qualify for a mortgage as long as you have a down payment of 10% or more. If you do not fit these criteria, then you may need to look for a lender offering poor credit mortgages to Canada newcomers.

Private Bad Credit Mortgage

A private bad credit mortgage may be right for you if any of the following statements are true:

  • Your credit score prevents you from obtaining funds through a typical lender.
  • A combination of non-residency and a lack of a down payment results in being turned down by traditional lenders.
  • Your lack of verifiable information prevents you from obtaining a standard mortgage.
  • You do not have a 10% (or more) down payment.

Private lenders consider many factors outside of these, so even when traditional mortgage providers say no, a private home loan is still an option.

How It Works

All you need to do is contact a private lender for a consultation. They can tell you what you need to do based on your current situation. For instance, if you are still waiting for permanent residency and you cannot pay 10% down, you may still qualify for poor credit mortgages through private lenders if you can provide documentation that shows your ability to repay recent obligations as well as proof of a reliable source of income.

Private home loans are fantastic alternatives for people who are new to Canada but do not qualify for traditional loans under the New to Canada programs. Contact a private lender to learn more about your unique situation.

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