The most important person in the mortgage approval process is the person you will never see or meet. That person is the underwriter. The underwriter works for the lender on the back end of your mortgage application. The underwriter is critical to the mortgage process, as he or she is the one who will approve or deny your mortgage. No lender funds or closes on a loan without the approval of an underwriter. When your mortgage application and paperwork gets submitted by your mortgage agent to the lender, the underwriter is the person who verifies the information and makes the judgment as to whether you qualify or not. He or she looks at four areas that can give them a more complete picture of you: your income, credit, debt ratios and asset information. Your home’s appraisal will also be taken into consideration. The mortgage underwriter will ensure your financial profile matches your lender’s guidelines and loan criteria and he or she will ultimately make the final decision: to approve or deny your mortgage. The underwriting process can seem intimidating. However, providing accurate information and supporting documents to your mortgage agent will save you precious time—and make your underwriter happy! 😀

Canada has seen a surge of international migration over the last few years and, with all these new faces in town wanting to plant roots in this great country, we wanted to touch base on some of the details surrounding mortgages and how new immigrants can qualify to be homeowners! Buying a house is an exciting step for anyone, but it is especially so for individuals who are new to the country. As daunting as it may seem, purchasing a home is completely possible with a little knowledge and preparation. If you are new to Canada and looking to get a mortgage, connect with a DLC Mortgage Professional today for expert advice and options that best suit you!

If you are already a Permanent Resident or have received confirmation of Permanent Resident Status, you are eligible for a typical mortgage with a 5% down payment – assuming you have good credit. Some additional criteria for qualifying includes: Must have immigrated or relocated to Canada within the last 60 months Must have a valid work permit or obtained permanent residency All debts held outside of the country must be included in the Total Debt Servicing Ratio (GDS/TDS) Rental income earned outside of Canada is excluded from the GDS/TDS calculation Guarantors are not permitted Owner-occupied properties if putting less than 20% down payment.

For Permanent Residents with limited credit, or individuals who have not yet qualified for Permanent Residency, there are still options! In fact, there are several ‘New to Canada’ mortgage programs through CMHC, Sagen™ and Canada Guaranty Mortgage Insurance, which cater to this group of homebuyers.

NEW TO CANADA PROGRAMS

To qualify for these New to Canada programs, you must have immigrated or relocated to Canada within the last 60 months and have had three months minimum full-time employment in Canada.

For individuals looking for 90% credit, a letter of reference from a recognized financial institution OR six (6) months of bank statements from a primary account will be required.

If you are seeking credit of 90.01% to 95%, you will need to produce an international credit report (Equifax or Transunion) demonstrating a strong credit profile OR two alternative sources of credit demonstrating timely payments (no arrears) for the past 12 months. The alternative sources must include rental payment history and another alternative, such as hydro/utilities, telephone, cable, cell phone or auto insurance.

Another option for New to Canada residents, depending on your residency status and credit history, are alternative lenders such as B-Lenders and MICs (Mortgage Investment Corporation). It is important to note that alternative lenders will require a down payment of 20%. Alternative lenders cater to individuals which lack a strong credit history, or a guaranteed income (recent immigrants, or the self-employed, for instance). As a result, these lenders generally have lower entry qualifications, which are offset by higher interest rates.

WHY IS ALTERNATIVE LENDING NECESSARY?

CRA arrears Income issues such as non-traditional income as with self-employed borrowers Credit issues such as low credit score, credit arrears, current mortgage or even bankruptcies Unexpected liens on title Foreclosure situations Unique financing needs/opportunities If you do not qualify for the New to Canada programs, or a standard mortgage, reach out to a DLC Mortgage Professional and they can help you navigate the alternative options!