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.
