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!
