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The first-time homebuyer kit for new Canadians

With over 300,000 new residents arriving in Canada (and over 400,000 expected next year ), Canada’s lenders are rushing to the arrival terminals with a variety of qualification programs.
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Navigating Canada’s home buying process can be complicated, but is intended to welcome new Canadians into the dream of homeownership.

With over 300,000 new residents arriving in Canada (and over 400,000 expected next year), Canada’s lenders are rushing to the arrival terminals with a variety of qualification programs. However, with so many options to choose from, many new Canadians are seeking out the expertise of a licensed mortgage broker to find the right lending product for their unique situation.

Marko Gelo, a dually licensed Mortgage Broker in British Columbia and Alberta, sheds some light on what to expect as a new Canadian looking to buy a home.

To get started, here are the most asked questions from new and prospective Canadians.

1. Eligibility: Who is eligible for a mortgage in Canada?

The following residency statuses are eligible for mortgage qualification in Canada;

  • Temporary Resident Work Visa
  • Permanent Resident
  • Provincial Nominee recipient
  • Non-Resident Canadian
2. Employment Status: Do I need to be employed to qualify for a mortgage?

Yes, you must be employed for a minimum tenure of at least 3 months.

3. Down Payment: How much money is required for a down payment on a Canadian mortgage?

Depending on your residency status you will require anywhere from 5% to 35% of the property purchase price.

What else should I be aware of?

4. Funds: Make sure your deposit is ready to be cashed

    1. Your deposit needs to be ready for swift movement during the offer stage, especially in a competitive bid process
    2. The funds must be fully verified by the lender (see below)

5. Verification: Be prepared to submit several verification documents.

    1. A 90-day history and/or full verification of the source of your funds. This is a standard request of all lenders as a part of Canada’s anti-money laundering policy.
    2. Documents to verify your Residency Status.

6. Be aware of property transfer taxes

When you purchase or gain an interest in property, you or your legal professional must file a property transfer tax return and you must pay property transfer tax unless you qualify for an exemption.

Here is how property transfer tax (PTT) is calculated in British Columbia:

  • 1% of the Purchase Price on the first $200,000;
  • 2% of the Purchase Price that exceeds $200,000 but does not exceed $2,000,000
  • 3% of the Purchase Price that exceeds $2,000,000
  • An additional 2% on the portion of the fair market value that is greater than $3,000,000 if the property is Class 1 property as determined by BC Assessment

Navigating Canada’s home buying process can be complicated, but is intended to welcome new Canadians into the dream of homeownership. Working with a licensed mortgage broker can help to simplify the process.

Marko Gelo is a dually licensed mortgage broker in the provinces of BC and Alberta. Complete the form below for a personal analysis of your financing scenario: