Mortgage financing possibilities for new immigrants and non permanent residents.

Source: TD BANK

You will thus find below a short description of the mortgage financing possibilities for new immigrants and non permanent residents.

New immigrants who chose to purchase a home in Canada can look forward to obtaining mortgage financing if they have received their permanent resident status. The down payment required for the transaction and consequently the allowable loan-to-value ratio will be determined by the clients’ credit history, their employment status, and their net worth. Here are a few details:

- Insured mortgage (minimum down payment of 5%)
o The buyer must have at least 2 years of credit history in Canada with at least 2 active trade lines.
o The buyer must be a full time permanent employee of a Canadian based company without a probation period. If the buyer is self-employed, then 2 years of financial statements will be required.
o The buyer must provide a 30-day history as to the origins of the funds to be used for the down payment and of an additional amount of 1.5% of the purchase price.

- Conventional mortgage (minimum down payment of 20%)
o The buyer must respect the same conditions as outlined for an insured mortgage.

- Conventional mortgage (minimum down payment of 35%)
o If the buyer is not employed in Canada or if he cannot provide satisfactory proof as to his self-employed income, then a letter of employment will be required to set the employment status.
o If the buyer does not have sufficient credit history in Canada, then a letter of reference from his/her financial institution will be required. The letter must state the length of the relationship, the status of the current accounts, and the repayment history of any loans.
o If the buyer can provide satisfactory proof of liquid assets equal to more than 50% of the purchase price, then the down payment can be considered at 25%.

For non-permanent residents, properties to be purchased are considered as rental properties and a 35% down payment is required. Clients must also provide:

- A letter of employment confirming the position held, the length of service, and the annual salary
- A reference letter from their financial institution confirming the length of the relationship, the status of the current accounts, and the repayment history of any loans.
- A copy of each lease if applicable.