Options for Homeownership When New to Canada

As a newcomer to Canada, you may feel you have few options when it comes to homeownership. While it’s true that newcomers often struggle to qualify for traditional mortgages, we’ve reviewed some of the alternatives, including the pros and cons of each.

1. Newcomer Mortgages

Newcomer mortgages are a special type of mortgage that some Canadian banks offer. To qualify, you must have immigrated less than 5 years ago, be employed full-time for at least 3 months, have a 5% down payment, and meet the qualification ratios for debt vs. income.

Even with relaxed requirements on credit and work history, many newcomers still struggle to qualify, making this a good option only for well-established immigrants with access to capital.

2. Private Lenders

Private lenders are individuals or private companies that lend money from their personal funds. Because they aren’t regulated in the same way as banks, they can grant mortgages to people who can’t pass the mortgage stress test.

However, this doesn’t necessarily mean it’s easy to qualify. Most private lenders require you to have at least a 15% down payment to compensate for the additional risk they take on by lending to you. That said, you may find that private lenders are more willing to overlook a lack of Canadian credit or employment history.

3. Home Buyers’ Plan (HBP)

The Home Buyers’ Plan is a government initiative that allows you to withdraw money from your Registered Retirement Savings Plan (RRSP) to use for a down payment on a home. If you have a Canadian RRSP, you may be eligible to withdraw up to $35,000, but it must be repaid within 15 years. Unfortunately, many newcomers don’t have an RRSP and can’t take advantage of this program.

4. Rent to Own Program

A Rent to Own Program allows you to rent your home for a set term before being given the option to purchase it. With our Rent to Own Program, you don’t need a massive down payment. You don’t need an extensive credit history. In fact, our program was designed to help those with no credit achieve their dreams of homeownership sooner.

We’ll guide you towards homeownership by helping you save money for your down payment. As you pay rent, you’ll also create a Canadian credit history and improve your credit score. We’ll provide you with realtors, if you don’t already have one and financial planners to help you budget and plan for your future. At the end of the term, you’ll purchase your home from us and become a homeowner.

Rent to own is the best option for newcomers because it allows you to live in your home immediately, letting you get established in Canada before you make the leap into homeownership.

Begin Your Homeownership Journey with JAAG Properties

Homeownership in Canada doesn’t have to be a distant dream for you and your family. Find a home you love in and move in right away with our Rent to Own Program! Apply online today or contact us for more information.

A Newcomer’s Guide to Buying Your First Home in Canada

Buying a home in today’s market is a challenge even for Canadians, so as a newcomer, you’re often at a disadvantage. Thankfully, we’ve compiled a handy guide to help you navigate the homebuying process!

What Newcomers Need to Know About Buying a Home in Canada

Eligibility Criteria

Both permanent and non-permanent residents may purchase a home in Canada, as long as non-permanent residents have a work permit.

You’ll need a Canadian bank account, and proof that you have enough money to make a down payment. You should also have a credit score of at least 680 to become a homeowner.

Mortgage-Related Terminology

Mortgage terminology varies around the world. That’s why it’s important that you understand Canada’s terms before you begin your homebuying search. Key terms to know include the following:

  • A mortgage is money you’ve borrowed to purchase your home. It covers the cost not covered by a down payment.
  • A down payment is a percentage of the purchase price that you pay in cash. For a home under $500,000, the minimum down payment is typically 5%, while more expensive homes require 10% if insured. Non-permanent residents usually put down larger down payments regardless of price.
  • Amortization is how long you’ll need to pay off your mortgage. The amortization is typically broken into smaller terms of 3-5 years, after which you’ll renew your mortgage with new terms.
  • The interest rate is the percentage you page to your lender in interest.

Types of Homes

The type of home you choose may influence its purchase price. The different types of homes for sale in Canada include:

  • Condominiums are part of a larger building or complex. Each unit is owned by an individual buyer, however the land is sits on is owned by the Condominium Company.
  • Single/Detached homes are houses intended for a single family located on its own property. The house doesn’t share walls with other houses.
  • Semi-detached homes are located on their own property, typically with their own yard and separate entrance, but they share a wall with another home.
  • Townhomes are attached to other homes on both sides. These can be freehold or condominiums. 
  • Duplex/Triplex properties are a single home divided into separate units.
  • Freehold properties where you as the owner own the land (typically single detached or semi-detached home but can also include townhouses)
  • Leasehold properties where you as the owner only own the unit and not the land (typically condominiums)

The importance of Location

Location is another factor that affects housing prices. Urban areas are typically more costly than rural locations, but are also more convenient, with easy access to amenities like grocery stores, schools, etc.

Larger cities have significantly higher housing prices than other, smaller cities, so you should adjust your budget accordingly.

Finding a Home in Canada

The path to homeownership in Canada can be difficult for newcomers, especially when you lack a Canadian credit history.

We know that buying a home is challenging, so we created our Rent-to-Own program. We work with you while you live in your home, save money and build good credit to buy it. At the end of your term, you’ll qualify for a mortgage so you can purchase your home from us!

Get Help Buying Your First Home from JAAG Properties

As a newcomer, you have additional barriers to buying a home in Canada, and we want to help. Apply online today to qualify for our Rent-to-Own program!

The Benefits of Renting to Own in Canada

The housing market in Canada is presently characterized by peak house prices and higher interest rates. If you’re discouraged by the current real estate landscape as a newcomer, you aren’t alone, and new options for affordable housing are now available to you. Our Rent to Own program grants you all the benefits of homeownership at a price you can afford.

Why Newcomers Should Choose Rent to Own Solutions

Rent to Own solutions are gaining popularity for newcomers because they can help you fast-track your journey to homeownership in Canada by allowing for smaller down payments and more time to build your Canadian credit score. The best part? You can live in your dream home while saving to buy it!

Benefits of Renting to Own for Newcomers

Gives You Time to Improve Your Financial Situation

If you’re new to Canada, you may struggle to qualify for a mortgage due to a lack of credit history. With no credit score, few banks or lenders will consider your application, and those that do will often have predatory terms and sky-high interest rates.

With our Rent to Own solution, you have a set term (typically three years) to build and improve your credit score. Financial planners will help you with budgeting, accounting, and other financial matters so that when you finally apply for a mortgage on your home, you’re sure to be approved.

Requires a Smaller Down Payment

When applying for a mortgage, most lenders will require at least a 5% down payment (but some homes may require as much as 10%). As a newcomer to Canada, we understand how daunting those numbers can be!

Rent to Own programs allow you to put down a smaller down payment, giving you the freedom to move into your dream home sooner. At JAAG Properties, we only require a 3% down payment to qualify for our Rent to Own solution.

You Can Live in Your Home Before Purchasing It

Rent to Own solutions empower you to live in your home while you save to buy it. You no longer need to wait and potentially miss out on your dream property because of financial restrictions. You’re free to furnish, renovate, and redesign your new home to your heart’s content, so that when you do purchase it, it’s entirely your own.

Find Your New Home in Canada with JAAG Properties

If you’re new to Canada, or are planning a move in the near future, you can own your home sooner than you think! Forget overpriced, overcrowded rentals and put yourself directly on the path to homeownership with our innovative Rent to Own solution.

Apply online or contact us for more information on how you can start living in your dream home today!

Can Newcomers To Canada Get A Mortgage?

Newcomers to Canada can face many challenges while trying to establish their new lives in an unfamiliar environment. Language barriers, cultural differences, and social norms can make it difficult to accomplish even the simplest of tasks. Of course, one of the biggest concerns for new arrivals can be finding secure housing, a place to live and call their own.

Acquiring the necessary financing to purchase a home in Canada can sometimes be a struggle for newcomers. They may have difficulties meeting the requirements of traditional lenders under typical mortgage programs, due to their lack of employment history, financial instability, and unestablished credit in Canada. While some who are new to the country may have sufficient finances to begin the homebuying process, others may need support to meet mortgage requirements.

There are solutions available for newcomers hoping to become homeowners. Several financial institutions, including many of the big banks, offer mortgage programs for new immigrants. But it’s important to note that there are certain criteria that will need to be met in order for newcomers to use these services. There are also rent-to-own housing options available to assist potential home buyers in purchasing their new home. Services, like JAAG’s Rent to Home Solution, are designed to help get newcomers who are struggling to meet mortgage requirements into homes sooner.

In most cases, in order to qualify for newcomer mortgages, new immigrants will need to be able to prove they have immigrated within the last 5 years. As well, they will need to be in Canada as either a permanent resident, a landed immigrant (in the process of getting permanent status), or on a valid working visa. Newcomers will, in most cases, also need to show proof of employment, typically with a minimum of 3 months on the job. Some exceptions for this may include prior arrangements for housing through an employer.

Of course, if new Canadian immigrants wish to utilize these types of mortgage programs, they will also need to meet the minimum down payment and qualification requirements set by the lenders. Some minimum down payment requirements can be as low as 5%. While others can be as high as 35%, especially if newcomers to the country don’t have a Canadian credit history or don’t qualify for an insured mortgage. Lenders will also look at other aspects, such as your debt to service ratio (which could include debt outside of Canada), and apply a mortgage stress test to ensure your eligibility.

As an alternative to using a newcomers mortgage program through one of the major financial institutions, potential homeowners can apply for a rent-to-own housing solution. For example, JAAG’s Rent to Home Solution provides newcomers who qualify an opportunity to find and live in their home now while they save and build credit for the future purchase. Typically, a rent-to-own contract, like JAAG’s, would have the client lease the home for 3 years with the goal of purchasing the home at the end for an agreed upon predetermined price.

During the lease period, part of the monthly payment is set aside to establish the down payment needed to qualify for the mortgage. Clients are encouraged to use the lease period to save money and establish a good credit score, to improve their chances of getting the best rates possible. Clients are also offered guidance and education through credit coaching and financial services to help them develop financial stability. At the end of the 3 year lease period, successful clients have the option to purchase the home for the predetermined price.

There are solutions available for newcomers to Canada who wish to become homeowners. For those who can meet the criteria set out by traditional lenders and big banks, mortgage options for new immigrants are a viable option. However, for those who are grappling with lender requirements, there are alternatives available, such as a rent-to-own housing model. Trusted and recognized rent-to-own companies, like JAAG Properties, offer simple financing solutions to experience homeownership while working toward financial readiness.