New immigrants - getting mortgage without job/credit history

[kn2172]

Hi All,

We are new immigrants coming from India as a family of 3.

we came to know from 'here' n 'there' that it is possible to buy a home as a newcomer before even having a job and credit history in Canada.

For that, we need to put down 35% downpayment. We are planning to put a downpayment of 100K CAD which makes our home buying budget around 290K CAD.

With this budget, we are planning to buy an apartment (2-3 Bedroom) in either Halifax, NS or some nearby small town of Vancouver/Toronto/Montreal.

Please let us know if the above information is correct and if we are going in the right direction.

Additionally, if you have any idea regarding a good location where we can get a 2 bedroom apartment with this budget, please suggest. (All over Canada)

Our basic requirements are a good school for our 3.5-year-old son, SAFE neighborhood, the apartment should be having good light n airflow, if we try to resale it after 4-5 years, we should be able to at least get what we invested or above. Don't want to make a loss on that part.

Comments, please.

Thanks.

 

[scylla]

Hi All,

We are new immigrants coming from India as a family of 3.

we came to know from 'here' n 'there' that it is possible to buy a home as a newcomer before even having a job and credit history in Canada.

For that, we need to put down 35% downpayment. We are planning to put a downpayment of 100K CAD which makes our home buying budget around 290K CAD.

With this budget, we are planning to buy an apartment (2-3 Bedroom) in either Halifax, NS or some nearby small town of Vancouver/Toronto/Montreal.

Please let us know if the above information is correct and if we are going in the right direction.

Additionally, if you have any idea regarding a good location where we can get a 2 bedroom apartment with this budget, please suggest. (All over Canada)

Our basic requirements are a good school for our 3.5-year-old son, SAFE neighborhood, the apartment should be having good light n airflow, if we try to resale it after 4-5 years, we should be able to at least get what we invested or above. Don't want to make a loss on that part.

Comments, please.

Thanks.

I would first decide where you are going based on job availability, etc. - and then look for properties in this area (rather than picking a place to live first). Also, move to Canada first and live in rental accommodations before you buy. See things in person and get to know the areas you are interested in before buying. Take your time - buying is expensive and you don't want to make a mistake on the location.

There's never a guarantee that you'll be able to get at least what you invested back if you sell. The market goes up and down and there are also expenses to consider on top of the price when you buy and/or sell (e.g. realtor fees, legal fees, land transfer tax). Best option is to work with a good realtor who can advise you on which areas typically have the best resale and what to avoid. But again, there's absolutely no way to guarantee that you will get your money back if you sell in 4-5 years.

Expect for properties to be more expensive in areas with good schools.

If you end up in an apartment / condo - you may be paying monthly maintenance fees and will want to see what they are before you buy and consider these in your budgeting.

You can use the following website to look at what your money will buy you were. But keep in mind that this is the cost of the property only and doesn't include legal fees, property transfer fees and other closing cost expenses.

https://www.realtor.ca/

 

[canuck78]

Agree. Would focus on looking for a job in Canada and rent for a year. What if you buy in a city and can’t find employment. You budget will be less than 290K with all the various fees involved and finding a home in the 250K budget rules out a lot of Canada. If you plan on having another child or visitors it also makes sense to purchase a 3 bedroom versus a 2 bedroom.

 

[kn2172]

I have been in touch with a mortgage advisor from CIBC, they have asked me to send copies of PR cards & SIN to process pre-approval ?

Is it ok to share PR cards and SIN number with bank officials?

Regards,
KN

 

[canuck78]

I have been in touch with a mortgage advisor from CIBC, they have asked me to send copies of PR cards & SIN to process pre-approval ?

Is it ok to share PR cards and SIN number with bank officials?

Regards,
KN

Yes it is necessary. You may want to check at various banks for the best rates or contact a mortgage broker.

 

[kelly0920]

With some google searches. I was able to find the answer to your questions.

Down payment without two years’ employment history
If you have a down payment of at least 35% of the purchase price, you may still qualify for a mortgage without the confirmation of employment that is typically required. Here are some guidelines for this situation:

• You must have immigrated to Canada within 5 years
• You must have permanent residence status
• You must have a minimum of three months’ full employment in Canada
• You may be required to obtain a letter of reference from your bank in your home country

Link to this": https://www.rbcroyalbank.com/mortgages/essential-mortgage-information-for-newcomers.html

Anyways, with the amount you have ($290k), you can buy a whole house in other parts of Canada. My friend just bought a $300k 6 bedroom house with huge farm in Terrace BC but he has a government job so he could move anywhere. I agree with the response above. Buying a place is such a big decision to make. Location is such a big factor.

Sharing with you my experience, when we bought our first place in 2015, we considered the location which has also some development in the area. We also found an apartment which was in foreclosure (nothing wrong with it. The owner lost his job and couldn't continue paying it anymore). We bought it below assessment value. 3 years later, the market went up. We painted the apartment with white ($2400 expenses) and put it on sale. We bought it at $188k (assessment value was $195k), put it on market for $375k. A week later, we were looking at 8 offers (bidding war) and sold it at $441k. Crazy, right? It was only 860sqft but it was in prime location (bus stop below our unit, walking distance to shops, close to school etc). With the money made, we were able to purchase a townhouse. Again, we considered a good location. Where we live right now is walking distance to school, farmer's market, safe neighborhood etc. BUT market slows down a bit. We're planning on buying a detached home but I think we're going to lose some money if we sell our townhouse and buy a detached home now.

For you, it's probably a good time to buy because it is buyer's market at this time.

The replies above are really helpful. If you can, study the real estate movement (tho, it's so hard to predict what's gonna be in the next few years). We never know at all. Aside from talking to a mortgage advisor, find a really good realtor.

 

[canuck78]

With some google searches. I was able to find the answer to your questions.

Down payment without two years’ employment history
If you have a down payment of at least 35% of the purchase price, you may still qualify for a mortgage without the confirmation of employment that is typically required. Here are some guidelines for this situation:

• You must have immigrated to Canada within 5 years
• You must have permanent residence status
• You must have a minimum of three months’ full employment in Canada
• You may be required to obtain a letter of reference from your bank in your home country

Link to this": https://www.rbcroyalbank.com/mortgages/essential-mortgage-information-for-newcomers.html

Anyways, with the amount you have ($290k), you can buy a whole house in other parts of Canada. My friend just bought a $300k 6 bedroom house with huge farm in Terrace BC but he has a government job so he could move anywhere. I agree with the response above. Buying a place is such a big decision to make. Location is such a big factor.

Sharing with you my experience, when we bought our first place in 2015, we considered the location which has also some development in the area. We also found an apartment which was in foreclosure (nothing wrong with it. The owner lost his job and couldn't continue paying it anymore). We bought it below assessment value. 3 years later, the market went up. We painted the apartment with white ($2400 expenses) and put it on sale. We bought it at $188k (assessment value was $195k), put it on market for $375k. A week later, we were looking at 8 offers (bidding war) and sold it at $441k. Crazy, right? It was only 860sqft but it was in prime location (bus stop below our unit, walking distance to shops, close to school etc). With the money made, we were able to purchase a townhouse. Again, we considered a good location. Where we live right now is walking distance to school, farmer's market, safe neighborhood etc. BUT market slows down a bit. We're planning on buying a detached home but I think we're going to lose some money if we sell our townhouse and buy a detached home now.

For you, it's probably a good time to buy because it is buyer's market at this time.

The replies above are really helpful. If you can, study the real estate movement (tho, it's so hard to predict what's gonna be in the next few years). We never know at all. Aside from talking to a mortgage advisor, find a really good realtor.

Just warning people that making a 200K profit in a few years is a very rare situation. This should not be counted on. The market in Canada has gone up, in general, over the past 20 years. It will go down at some point so you have to be prepared to stay in your home. Look at Australia for an example of how the tides are turning.