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Guide to the New Immigrant Mortgage Program

In this guide, you’re going to learn how to qualify for the New Immigrant Mortgage Program, and the financial institutions offering mortgage packages for new immigrants.

The Canadian government has always encouraged immigrants seeking a better way of life to move to Canada. But in 2015, the country kickstarted the Express Entry system to increase the volume and quality of immigrants looking to settle down in Canada.

The government of Canada also put in place many incentives and programs to attract people from around the world to leave their home country and make a life in Canada. The New Immigrant Mortgage program is one of such programs.

It is a program that is designed to help new immigrants settle down quickly and adjust to the Canadian way of life. Also known as the “New to Canada Program,” a few financial institutions – both government and private, offer these mortgage programs to new immigrants due to the difficulty immigrants face when trying to obtain a mortgage, acquire a credit score, or build a Canadian credit history.

Some of the default insurance companies providing a New to Canada Mortgage include:

  • Canada Guaranty
  • Genworth Financial
  • Canada Mortgage & Housing Corporation

Preliminary Requirements

Preliminary requirements for the new immigrant mortgage program varies from institution to institution. But the core requirements are mostly the same. Ticking all of these requirements will help you on your way to becoming a newcomer homeowner. Some of these requirements include:

Status & Stay

The immigration path to Canada has two forks. Immigrants can come to Canada through a permanent residence visa, or with a temporary work permit. The former allows you to enjoy better rates and more relaxed requirements more than the latter.

However, to qualify for a mortgage under the new immigrant scheme, you must have been resident in Canada for a minimum of 60 months. You must also have your Landed Immigrant Status. If you don’t have this, you can apply for it at the Department of Citizenship and Immigration.

Employment History & Credit Score

More often than not, your employment history affects your credit score and vice versa. A stable employment history increases your chances of having a good credit score.

To qualify for the New Immigrant Mortgage Program, you must be in full-time employment for three months minimum. A stable job is an essential factor to be eligible for any mortgage, including the immigrant mortgages.

If you don’t have an international credit report from TransUnion or Equifax, you can provide the following:

  • Tenancy history
  • Utility history

Your alternate source of credit must show consistent, timely payments dating back to a year. Your utility history can include telephone bills, vehicle insurance, and hydro utilities. Your tenancy history must be backed by a letter from your landlord to verify you’ve been paying your rent on time for the past 12 months.

Property Value

The value of the property also plays a massive role in qualifying for a mortgage under the new immigrant scheme. You can’t apply for the mortgage program where the property you intend to buy is above C$999,000.

Also, new immigrants can only purchase property that is covered under the New Home Warranty Program. It is possible to buy an existing home. However, the property must be in a location that has a robust real estate re-sale value.

PR vs Work Visa

As earlier stated, there are two routes to immigration in Canada. Permanent residency and temporary work permit. Permanent residents have a better advantage when qualifying for the New Immigrant Mortgage Scheme.

Look at the table below to get a good comparison

PR Minimum Down payment 5% Funds directly from the buyer
Work Visa Minimum Down Payment 10% Funds can be borrowed or monetary gift

Property Type

Apart from the differences mentioned, a permanent resident has more options to buy a property where every other criterion is met. With a 5% down payment, Permanent residents can buy:

  • Single Family Unit
  • Duplex

With a 10% down payment, PRs can purchase triplexes and fourplexes. Also remember that a Canadian PR with an excellent credit score can qualify for a conventional mortgage under a grade “A” lender. An individual on a temporary work permit can only buy a single unit with at least a 10% down payment on the property.

Mortgage Rates

A mortgage rate is a rate you pay after your mortgage has been approved, and you’ve purchased your home. It is the total of the principal sum and interest that you pay monthly.

Under the New Immigrant Mortgage Program, potential homeowners have the choice of opting for the mortgage rate that’s suitable for their needs. Some of these rates include:

  • Fixed-Rate
  • Adjustable-Rate
  • ┬áVariable Rate

Amortization

Your amortization is the length of time it takes to pay off your mortgage, including the interest and principal. Most mortgage insurance companies, offering the New to Canada Program, offer amortization options that go up to 25 years, and this includes Genworth Canada, as well as Canada Guaranty.

Final Thoughts

Getting a new immigrant mortgage under the New to Canada Program is not as difficult as it seems. Make sure you meet all the requirements mentioned above to become a proud homeowner.

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