Residential
Programs
New Immigrant
Work visa (permit)
Non Resident
Employee
Business for Self
Credit Problem
First Time Home Buyer
Students(immigrant)
Rental
Commercial
Construction
Residential
The programs listed in the following are examples of different programs for residential mortgage. What most of the banks and lenders offer is a residential mortgage. This is a mortgage for the property in which the intention of the buyer is to use it as owner occupied or living.
If you are new to Canada as immigrant you are eligible to buy a property. This can be while you have not started to have a credit history in Canada. However it is recommended to start having your credit history as soon as you can.
Also, your income is not verified in Canada and you have overseas income to pay your monthly payments of your mortgage.
The definition of new to Canada is different in different banks/Lenders. The limit could be 3, 5 or 10 years being in Canada since you became immigrant based on your immigration paper or PR (Permanent Resident) card date.
Usually the down payment is an important factor in this kind of mortgage. The source of down payment usually need to be identified as the lenders/banks want to make sure there is no money laundry. If your money has come from overseas it should be in your bank account. The fund could be transferred (wired) from overseas. Source of funds can be selling of company, property, vehicle or equipment in overseas or other ways.
People with work permit in Canada are eligible to buy property in Canada. These are people with no immigration status who want to purchase a property in Canada.
These people can buy with a very low down payment (as low as 10%) and have proven income from their employment to pay their mortgage.
People with work visa need to have Canadian credit history to be eligible for this program. Alternative to credit history can be bills of hydro/utilities/telephone/cable in the last 12 months or rent payments confirmed by landlord or bank statement.
People who are not a residence of Canada can buy a property in Canada. This type of mortgage requires a larger down payment. Also as it is an investment or rental property, the property should be able to pay its expenses. Basically the monthly rent (income from property) should cover the monthly mortgage, 1/12 of annual property tax and strata fee if applicable.
People who are Canadian citizen or immigrant and have proven employment can buy a property. The limiting factor would be down payment and also the income.
Good credit history is a valuable asset and people with the score of more than 680 are eligible to buy a property with as low as 0 down payment. However people with score of more than 600 still can use the program. People with good credit can access to competitive rates and all products.
Usually the required documents are 2 last pay stub and a job letter from employer confirming the employment. The type of employment as full time or part time and in case of part time the guaranteed number of hours per week should be identified. Also the salary or per hour income should be stated in the letter. The lender/bank verifies the employment of the applicant.
In case of high ratio mortgage which the loan to value is more than 80% the premium insurance (CMHC/Genworth) should be paid and is added to the mortgage.
Table below indicates the insurance premium charged based on the down payment when purchasing a property:
| Down Payment | Insurance Premium |
| N/A | N/A |
| 5% | 2.75% |
| 10% | 2.0% |
| 15% | 1.75% |
| 19.99% | 1% |
| 20% | 0 |
People who are Canadian citizen or immigrant and have their own business can buy a property. People who have registered a business in Canada are in this category. The business can be of any type of Sole proprietorship, partnership or incorporation.
Good credit history is a valuable asset and people with the score of more than 680 are eligible to buy a property with as low as 10% down payment. However people with score of more than 600 still can use the program. People with good credit can access to competitive rates and all products.
Usually the down payment is an important factor in this kind of mortgage. The source of down payment usually need to be identified as the lenders/banks want to make sure there is no money laundry. Usually the money in your bank account needs to be in your account for 3 months to be considered as your money. The money in business account is not a valid down payment. Some valid source of down payment can be funds from sell of a property, vehicle or other ways.
The business is required for most banks/lenders to be registered for at least 2 years however having an employment history in the same line of business can decrease this limit.
The income can be as stated income however the income should make sense for type of business.
The required document would be documents of registration of business and Notice of Assessment from Revenue Canada as a proof of no tax owing to government.
In case of high ratio mortgage which the loan to value is more than 65% the premium insurance (CMHC/Genworth) should be paid and is added to the mortgage. Some lenders have different criteria and their limit is 80% though.
Table below indicates the insurance premium charged based on the down payment when purchasing a property
| Down Payment | Insurance Premium |
| - | - |
| 10% | 4.75% |
| 15% | 2.9% |
| 20% | 1.64% |
| 25% | 1% |
| 30% | .8% |
| 35% | 0 |
In case your credit score is low, your have late payments in your credit history or you are discharged bankruptcy, still chances are you can get a mortgage. You have to remember that Alternative or B lenders usually charge a fee and they do not offer competitive rates as prime sector.
First time home buyers used to have advantage of being able with 5% down payment. This is not true any more and if your are first time home buyer and employed (income qualified) you can buy with as low as 0 down payment.
One advantage of being a first time home buyer is that you can buy a property with the RRSP taken our as Home Buyers Plan (HBP) without paying tax for it. In this case every one is eligible to use up to $25,0000 of their RRSP taken out for buying the first house. If husband and wife this amount increases to maximum of $50,000. Be reminded that money taken our from RRSP without tax deduction needs to be returned to RRSP account within 15 years.
The other advantage of first time home buyer is exemption from Property Transfer Tax. You can get full exemption of property transfer tax if the purchase price is Max. $425,000. Also you would be eligible for partial exemption if purchase price is between $425,000 and $450,000.
Please refer to closing cost and property transfer tax for more details.
Students especially who are graduate student and studying toward Masters or PhD and have income from university can be eligible for mortgage.
The graduate student’s income is mostly from scholarship, teaching assistant and research assistant. Using their income and assuming that they have immigration status and credit history they can apply and get mortgage. The better their score and credit history is the lower the down payment can be.
However if you are an undergraduate/college student and have some income still you can apply for a mortgage. In special cases where you do not have income or not enough income the guarantor can help to qualify you to get a mortgage.
Rental
Rental property is a residential property that is used for income generation. Basically the rental income pays for at least part of your mortgage if not all. The insured product for purchasing a rental property no longer exist. So the minimum down payment is 20% as a conventional mortgage. Please contact me for more details.
Commercial
Construction
