Newcomers to Canada wanting a place to call their own naturally feel like a home purchase is the logical next step. Buying a home is a rewarding and challenging experience for anyone, but for those newcomers to Canada, there will be added challenges to overcome. This guide will help you to understand how to navigate the Canadian real estate market and provide you with the necessary steps to take.
Step 1: Fulfill the Required Conditions for Buying a Property
You must have a visitor visa (temporary resident) or be a permanent resident (student visas do not make you eligible).
You must have the right to work in Canada and have had a full-time job that generates income for at least three months.
You must have all the required documentation if you still have assets, debts, and bank accounts abroad (e.g. bank statements, a reference letter from the financial institution, etc.).
Step 2: Establish a Credit Score
For a lender to pre-approve you for any type of loan you will need to establish a credit history with a strong credit score. Opening a bank account, applying for a Canadian credit card ,and keeping your paperwork for utility bills, bank statements, and records of pay are all recommendations to help with this.
An established credit history in Canada is not necessary to obtain a mortgage, however, it will certainly help and possibly give you access to a better interest rate.
Step 3: Provide Proof of a Down Payment
Lending guidelines for newcomers to Canada can change often and will vary based on your permanent or temporary resident status and whether or not you’ve already established a Canadian credit history.
A minimum down payment typically will range from 5%, if you already have Canadian employment and credit history, to 35%, if you have no history whatsoever. The best advice would be to contact a local mortgage specialist or mortgage broker to help you determine your requirements based on your personal situation.
Don’t have a lender? Contact me to be put in touch with a trusted mortgage professional with experience in lending to immigrating Canadians.
Step 4: Mortgage Pre-Approval
Before you even begin to shop, you should obtain a pre-approval from a Canadian lender. Mortgage preauthorization is indispensable. It determines the amount you can borrow for a mortgage, gives you better negotiating power as a buyer, and guarantees your mortgage interest rate for 90 days.
The lender will take into account the amount you have for a down payment, your monthly income, and expenses to determine how much you can afford to pay for your mortgage monthly.
When you are budgeting for a mortgage, remember there will likely also be additional home purchase fees.
Step 5: Hire An Experienced Real Estate Agent
An experienced local REALTOR® is one of the best allies you can have when buying property.
Your agent should be able to demonstrate a working knowledge of the neighbourhoods you are considering—their pros and cons, knowledge about the schools, the amenities, transportation and the demographics.
It’s also very important to feel like your agent understands your needs and is quick to respond to you when you have questions, because you’ll likely have plenty of them along the way. Building trust and a good rapport is essential to a good working relationship.
Step 6: Start Looking for Your New Home
You can now start your search for a home. What kind of property do you want? Would you like to live in the city or the country? Do you want to buy a new construction or an existing home? These are some of the important questions you’ll have to discuss with your REALTOR®.
Real estate agents often have industry knowledge and expertise that enables them to spot potential issues with prospective properties and to handle the negotiation process with sellers.
Step 7: Make an Offer
Once you find a home that you’re interested in, you’re ready to make an official offer. Your agent will help you decide on a purchase price using their market knowledge and submit the necessary forms to the seller.
Your agent has the expertise to handle the negotiations on your behalf, which can be especially helpful if English is not your first language, and administer the paperwork to your lawyer and the mortgage company.
There is of course, much, much more to know when buying a house in Canada as a newcomer/immigrant and you can get more information from the , but the most important thing will be to surround yourself with a good team. A top real estate agent, a great mortgage broker/specialist, and a reputable lawyer are crucial to helping you protect your new investment and make the transition to life in Canada as simple as possible.
Take the next step in your journey
I look forward to working with you and helping you reach your home ownership goals. Reach out to get in touch and start the process today. I offer:
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CENTURY 21 Fusion
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