New Immigrants : Buying Home Vs. Rental

[kn2172]

Buying a home :
Hi All, I just got a thought in mind, would like to know your views on it.
I am planning to reach Canada this year around Oct-Nov as a new immigrant from India. (Nova Scotia Provincial Nominee)
How do u think about buying a small studio or 1bhk (whichever is cheap) apartment in Canada instead of paying rent as we have decided to stay in Canada, Why not put the rent money in loan repayment.
For e.g. I will be paying at least 1000$ in rent every month , than y not put that money in loan repayment ?
- Do you think it is the right thing to do?
- Can new immigrants buy home right away?
- What areas/city do you suggest for buying a low cost apartment and expect a good rent (in case we move out) as well as good appreciation.
- How is loan scenario for new immigrants?
- Are there real estate frauds like in India?
- How are the ROI in Canada especially Halifax Area.
Please help.

 

[mrbeachman]

How do you plan applying for a mortgage without any credit history in Canada?

Please tell me your secret.

 

[steaky]

How do you plan applying for a mortgage without any credit history in Canada?

Please tell me your secret.

Perhaps OP intend to buy home with cash and then use the home as collateral for getting loans!

 

[psharma.np]

This is something I have also been thinking but will need further information on how to buy a home in Canada. If one has a good credit history from US, will that help to get a mortgage deal ? What is the average price of a home/apartment in GTA ?

Any new immigrant has bought a home recent, pls. share your experience.

 

[scylla]

This is something I have also been thinking but will need further information on how to buy a home in Canada. If one has a good credit history from US, will that help to get a mortgage deal ? What is the average price of a home/apartment in GTA ?

Any new immigrant has bought a home recent, pls. share your experience.

Unfortunately your US credit history usually isn't of much help.

GTA average house prices are currently (as of March 2016):
Detached - $910,375
Semi - Detached - $637,867
Townhouse - $530,353
Condo Apartment -$389,319

You can find more information on average house prices here:

http://www.trebhome.com/market_news/market_watch/2016/mw1603.pdf

 

[alok4best]

Well, I know the thinking and intentions behind what OP has said.

However, there will be major roadblocks.

i. You are supposed to make a down payment of 5-20% of the value of property. Considering the kind of prices of average homes in Toronto and around, it means you must have at least 50K CAD cash to even think about owning a place.

ii. Getting a bank loan is very unlikely if you do not have a credit history in Canada. And obviously, immigrants won't have a credit history to begin with. Few banks can still dare to overlook this fact, given you can show a high paying job or household income, something in the north of 100K CAD a year. Even then, they will ask you to ensure your mortgage.

iii. You are very unlikely to get a good rate unless you have a good credit history. Unlike India, where rate of interest hardly vary from one bank to another, Canada is different. Here the mortgage rates could be anywhere between 2-5%, based on your credit history and negotiation skills.

Long story short, the most sensible thing to do is to wait for a year, save as much as you can, and then proceed.

Source: First hand account. Already done the research and had meetings with by bank representative and real estate agents.

 

[Ponga]

Unfortunately your US credit history usually isn't of much help.

GTA average house prices are currently (as of March 2016):
Detached - $910,375
Semi - Detached - $637,867
Townhouse - $530,353
Condo Apartment -$389,319

You can find more information on average house prices here:

http://www.trebhome.com/market_news/market_watch/2016/mw1603.pdf

Some lenders/banks do consider U.S. credit history.

HSBC is one bank that allows the transfer of credit history . It's important to note that this is not automatic; the borrower must give them permission to do this.

 

[jc94]

New immigrants CAN normally purchase real estate as long as they have a 35% down payment.

Some banks also force you to take out home owner protection insurance (normally only needed on 5-20% down payment) if you are new.

US credit history is considered by some banks; RBC offer it too.

If you are looking at purchasing a condo by the way, be warned a lot of places charge huge condo fees. $800 a month just for the fees before you get into the actual mortgage cost is not unusual even if all they offer is grass cutting and snow clearance. Apartment rentals include this and in many cases other expenses (water common, hydro varies).

This may not matter massively to someone from India (though I don't know which area, Pune tends to be quite pleasant compared to say New Delhi in the summer) but it gets a little warm in the summer and no apartment rentals that I found offer central air. Which means you'll be wanting a window AC unit.

As an example, last night it was 30C in my apartment despite it being 10C outside. I would find living without AC in the summer extremely difficult. But then I'm from Britain

 

[steaky]

As an example, last night it was 30C in my apartment despite it being 10C outside. I would find living without AC in the summer extremely difficult. But then I'm from Britain

I'm sure your indoor temperature will drop if you open your windows to allow outdoor fresh air into your apartment.

 

[jc94]

I opened the door and window from 7pm to 10pm. The temperature did not change.

I don't like leaving my balcony door open and unlocked while at work

 

[alok4best]

I opened the door and window from 7pm to 10pm. The temperature did not change.

I don't like leaving my balcony door open and unlocked while at work

Leave it open overnight.
I live in a condo and find temp around 27-28 everyday I come back from work.
I then open the balcony doors and windows and it reduces to around 23-24 in few hours, which is comfortable.