Welcome to Canada!

Just because you are a new immigrant does not mean that you have to wait to purchase a home. If you have been in Canada for less than three years, have landed immigrant status, and have been employed in Canada for a minimum of three months, you can qualify for a mortgage.

We’ll help you find the best rates and best mortgage options to help you buy your home. Call us today, we’re here to help!

Canada is deemed to be one of the best countries in the world for immigration as it offers great opportunities for employment and personal growth. Many people perceive Canada as an ideal place for those looking for a better quality of life and money. Homebuyers worldwide are welcome in Canada with no restrictions on the amount or type of real estate. However, most banks limit the number of estates they will finance to 5 properties per person. There will be various documents and steps when applying for a mortgage when you are new in Canada, and it will all depend on whether you are a permanent resident or not and have a good credit standing.

The majority of renters that want to apply for a mortgage are afraid as they might not be qualified. To qualify for a mortgage loan in Canada, you must have a minimum of three months of full employment in the country. Several mortgage brokers offer great deals and viable programs for newcomers, even when you have poor credit standing, as long as you meet all eligibility requirements.

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Here are a few tips that will surely help you have everything you need in submitting your application

1. Building your Credit

This is a basic yet important step in getting a mortgage in Canada. Strong credit will score you a better mortgage rate which you can use in saving thousands of dollars in the long run. Lenders review your credit report to check your credit score and monitor how reliable you are when paying your bills.

If you are a credit cardholder, pay your bills in full and on time. This also goes with your other utility bills such as electricity, rent, and phone services. You have to prove you are persistent in paying your bills and have a consistent source of income. Lenders like to know and see evidence that you are capable of paying your mortgage. Resist any unnecessary spending and spend only what you can afford.

2. Save up for Down Payment

You may start saving up for your down payment as you build your credit, which requires patience. Usually, a down payment should be available within 30 days before closing the purchase for banks. If you are new in Canada and have a permanent residency, you must put at least 5% of the purchase price. However, if you are a non-permanent resident, you must put at least 10% of the purchase price.

Your down payment can affect the total cost of your mortgage. Bear in mind that the bigger the down payment is, the smaller your mortgage payment will be, and it will take you less time to pay off your mortgage.

3. Mortgage Provider

You may opt to get a mortgage through a lender or bank or work with a mortgage broker in Canada. They are the ones who will go around, do the shopping for you and negotiate on your behalf based on your qualifications and what is available in the market.

Mortgage brokers have access to financial institutions. That is why they can haggle better rates and terms and provide you with better options. Often, a broker’s service is free and works independently, so there is no reason not to consult on one and get expert advice.

4. Mortgage Term

A mortgage term is your amortization period or the length of time that will take you to fully paid the loan. One of the most common mortgage terms in Canada is a 5-year term with a 25-year amortization period. Once your term has expired, you may negotiate with your lender for a new term or opt to look for a new lender.

There are things that you need to consider before choosing your mortgage term. If your mortgage has expired, there are chances your lender may offer you a lower or higher interest rate than your current, which might affect your budget. So, weigh your options properly.

5. Fixed-Rate vs. Variable Rate

A fixed-rate mortgage is a mortgage loan wherein the interest rate remains constant or the same throughout the agreed term. This is the safest term for most homeowners as they already know exactly what their monthly payment will be over a set period. This can appeal to individuals in the middle of stretched financial situations and want to minimize any financial risks.

In contrast, the variable-rate mortgage is a type of home loan where interest payments will be adjusted at a certain level depending on the fluctuation of the prime rate. A variable-rate mortgage may be ideal for a few people due to its lower than the fixed rate. However, this is not recommended for everyone, most especially to those who are not risk-takers.

6. Credit Supporting Documents

If you are new in Canada and your credit is not that strong yet, you will be needing to provide additional supporting documentation. You may need to present the following:

Proof of income; either an employment contract or pay stubs
Valid work permit or landed immigrant status
12 months proof of payment for rent, utility bills, insurance, phone services
Several months of bank statements
Documented regular savings for 12 months

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Let us help you

Homebuyers tend to borrow more money when applying for a mortgage loan. Lenders will want to know your existing debts and your ability to repay them. They will be looking at your debt-to-income (DTI) ratio, which shows the size of your debt versus your gross monthly income. Though all lenders have different requirements, most avoid lending money to applicants whose DTI ratio is above 43%. Paying off large debts before applying may improve your chances of getting approved for mortgage financing, and it will also be easier to pay for your monthly mortgage if you do not have other debts to settle.

The bottom line is, all you have to do is be honest if you want to get approved. Giving false information will not make your situation any better. Whether you are applying for a mortgage or not, you should be looking after your finances to be in a more powerful and well-established financial position in the future.

Saif Abdulah, one of the best mortgage brokers in Canada, can most definitely help you with all the processes in applying for mortgage loans and arranging you with the best mortgage lender. With his years of experience as a mortgage broker in Canada, he is the best bet to be in contact with. He is committed to delivering the best service and customer satisfaction.

We do business in the following areas in Canada:

Toronto, North York, Scarborough, Pickering, Oshawa, Ajax, Whitby, Etobicoke, Thornhill, Richmond Hill, Markham, Stouffville, Uxbridge, Vaughan, Concord, Woodbridge, Mississauga, Oakville, King City, Caledon, Nobleton, Milton, Aurora, Newmarket, East Gwillimbury, Keswick, Bradford, New Tecumseth, Georgina, Innisville, Guelph, Barrie, Ottawa, Orangeville, Collingwood, Kitchener, Hamilton, Cambridge, Waterloo, St. Catharines, Niagara Falls, London, Peterborough, and Ontario.

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Home Buyer’s Guide

A complete guide to help you learn everything about buying a home.

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