When you immigrate to Canada, you will eventually want to purchase a home for yourself and your family.  Not only is a home a safe, welcoming place, but buying a home is a great investment to make for your future in Canada. If you are a new immigrant to Canada, here are some of the common mortgage challenges you may be facing. 

Affordability

It’s no secret that houses have dramatically increased in price over the last few years, so people who are new to Canada may find it difficult to purchase a home for their family. 

Additionally, if you require financing to purchase a home (also known as a mortgage) Canadian lenders may find it difficult to extend financing to you because there isn’t the same work history or proof of income that there would be for people who have worked in Canada for years. 

Bidding wars

This is a relatively new trend in the Canadian housing market, but you might find houses listed for $499,999 but it ends up selling for $600,000 because the inventory is just not available and houses are hard to find. 

Additionally, the number of offers on the table and holding offers makes buyers artificially increase their bids in hopes of winning and being able to purchase the home. It’s important that new immigrants to Canada understand what they can afford in terms of financing before they get into a bidding war on a property that might cause them to put in a bid they can’t support. 

No credit history

A person’s credit history is one of the most important factors when it comes to applying for a mortgage. 

It’s expected that borrowers have at least a year’s worth of credit history (either Canadian or from their own home country) in order to prove that they are able to make the payments on the amount of money they borrow. 

Building a credit history can take some time, so it’s important that as soon as you come to Canada to start working on building your credit. 

Language barriers 

Many times, new immigrants to Canada speak a language other than English or French – or they may still be learning English or French. This, combined with a lack of understanding of how the Canadian housing market works or how Canadian mortgages work, can make it very difficult to be successful in buying a home when they come to Canada. 

Understanding interest rates

There are two types of mortgages in Canada when it comes to interest rates: fixed and variable. Fixed rate mortgages means that the homeowners will pay the same interest rate for the term of the mortgage – usually 5 years – and then they will renew after the 5 years and the interest rate will be updated then. 

The second type of variable. This means that the amount of interest the homeowners pay goes up and down depending on what the prime interest rate of Canada is. This could mean the payments change every month or two. 

Buying a home can be an overwhelming process for those who just move to Canada from another country. With some time and patience, newcomers to Canada will be able to buy a home for their family! 

Contact Us today

If you are a new immigrant looking to purchase a home, we can help. Call Sure Loan For You today to discuss more details.  

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