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Private Mortgages
Feb 09, 2016

Non-Canadian Resident Mortgage: General Guidelines

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If you are not a Canadian resident but are still interested in buying property in Canada, you’ll be happy to know that there are several options for home loans that might apply to you. The information below provides some general guidelines about these choices, with a specific focus on private home loans in Toronto. However, they apply to most of the rest of Canada as well.

What is a Non-Canadian Resident Mortgage?

A non-Canadian resident mortgage is a private home loan available to qualified home buyers who have immigrated to Canada, are in the process of relocating, or are US citizens who plan to purchase residential property in Canada. If you fall into one of these categories, a public bank or private lender will examine your credit history, confirm your income and assets, and then make a loan offer to you if they feel it is appropriate. The rest of the process is similar to buying a house in either the United States or Canada, including the home inspection and appraisal process as well as a scheduled closing time when the loan can be properly executed and the property can be legally purchased.

Who is Eligible for a Non-Canadian Resident Mortgage?

When you apply for one of these private home loans, the lender will take some time to make sure you meet the basic eligibility requirements. This includes a look into your credit history to make sure you aren’t a bad risk and a confirmation of your employment, income, and existing assets. In most cases, you will need a reference letter from a banker or credit bureau in your home country. Finally, the property you are looking to buy will receive an appraisal and the lender will send an inspector to make sure it conforms to certain standards. Additional lenders might have additional requirements, but Canadian law ensures that these basic criteria must be met before the mortgage can move forward.

How Much Does it Cost?

While the specific loan programs vary from region to region, the majority of non-Canadian resident mortgages require you to be able to pay 35% down in addition to closing costs. You need to be able to provide proof of these funds and have the money available in Canada, which means that you might need to transfer the amount from a US bank to a Canadian one beforehand. In some cases, you also need to provide proof that you can may the first year’s worth of principal, interest, and property tax payments. Again, these funds must be in Canada at the time of closing. The total amount of this mortgage needs to be less than $1 million Canadian, and the amortization is typically 25 years.

A non-Canadian resident mortgage is an excellent choice for somebody who is new to Canada or for immigrants who are looking to buy their first homes. As long as you meet the eligibility criteria outlined above and are willing to make Canada your long-term home for at least part of the year, you will likely find this kind of mortgage to your liking.