Mortgage help!

[paisly]

Hey all,
It's been 1 week that me and my husband migrated to Canada. We both worked in the same company and we both got transfer in the same time. We thought of buying a new house but since we were new to this place we didn't know more about the procedures. We searched online and read a blog from privatelend . This blog had ways on how to get a mortgage when we don’t have any credit in Canada. But since its our first experience in taking up a mortgage. Need advise!

 

[scylla]

Best thing you can do is go to your bank and speak with them. I wouldn't rely on the advice given on some random blog.

 

[ALRIVAS]

Hi paisly you need a downpayment according to your status and credit.
Newcomer or investor 35%
1 year pr with some credit 15% or more
2 years pr with some credit 10% or more
3 years with good credit 5%.
Don't forget that the 17th of October new mortgage rules will apply.
For more info go to alrivas .com

 

[COPRQuestion]

Hi paisly you need a downpayment according to your status and credit.
Newcomer or investor 35%
1 year pr with some credit 15% or more
2 years pr with some credit 10% or more
3 years with good credit 5%.
Don't forget that the 17th of October new mortgage rules will apply.
For more info go to alrivas .com

Hi Alrivas, what are the new mortgage rules? I'll be arriving in February looking to buy a CAD 1m property, we'll have a 35% down payment. is there anything else we need to be aware of?

thanks

 

[ALRIVAS]

New rules don't apply to you.

 

[sharedknowledge]

Best thing you can do is go to your bank and speak with them. I wouldn't rely on the advice given on some random blog.

I agree with Scylla. Better to go to a bank. But, beware. My own experience with RBC was fantastic while BMO was extremely terrible.

 

[Andre Pasche]

Hi Alrivas, what are the new mortgage rules? I'll be arriving in February looking to buy a CAD 1m property, we'll have a 35% down payment. is there anything else we need to be aware of?

Hi there. I'm a realtor in Toronto. Here is some information that might help you. The mortgage rules are becoming a bit tighter since the real estate market here in Toronto is out of control in some areas. As the previous poster mentioned they will not affect you. Since you are a newcomer to Canada you already have to go through many checks due to the higher risk of default that banks see in those who are trying to establish themselves in a new place.

Ultimately the banks are making it so that buyers are stress tested at higher mortgage rates than they are getting at the current moment in time. So if you are getting a 5 year fixed mortgage at 2.5%, you may have to to show the bank that you can afford a mortgage at lets say 4.5%. That way when rates go up (they will one day go up) you can afford it.

Since you are hit with a 35% downpayment, the cards are already stacked against you. Most can't put down 35%. Since you are able to do this I'm guessing you are already in a better financial position than most. The hard part for you will be showing proof of income from back home if you don't have a job secured upon your arrival.

hope this helps! best of luck

 

[COPRQuestion]

Hi there. I'm a realtor in Toronto. Here is some information that might help you. The mortgage rules are becoming a bit tighter since the real estate market here in Toronto is out of control in some areas. As the previous poster mentioned they will not affect you. Since you are a newcomer to Canada you already have to go through many checks due to the higher risk of default that banks see in those who are trying to establish themselves in a new place.

Ultimately the banks are making it so that buyers are stress tested at higher mortgage rates than they are getting at the current moment in time. So if you are getting a 5 year fixed mortgage at 2.5%, you may have to to show the bank that you can afford a mortgage at lets say 4.5%. That way when rates go up (they will one day go up) you can afford it.

Since you are hit with a 35% downpayment, the cards are already stacked against you. Most can't put down 35%. Since you are able to do this I'm guessing you are already in a better financial position than most. The hard part for you will be showing proof of income from back home if you don't have a job secured upon your arrival.

hope this helps! best of luck

Thanks for the info, I've spoken to a mortgage broker and he said I'm fine and none of these changes will impact me too much. In fact My issue is whether to buy a property outright and not mortgage or taking out a small mortgage

As you quite rightly point out getting the mortgage without a job is going to be the tough bit. However, I understand HSBC will transfer my credit history from Hong Kong and if necessary I can seek up front approval now using my Hong Kong salary.

 

[anujoshi]

Thanks for the info, I've spoken to a mortgage broker and he said I'm fine and none of these changes will impact me too much. In fact My issue is whether to buy a property outright and not mortgage or taking out a small mortgage

As you quite rightly point out getting the mortgage without a job is going to be the tough bit. However, I understand HSBC will transfer my credit history from Hong Kong and if necessary I can seek up front approval now using my Hong Kong salary.

Really it depends on your ability to pay month-to-month. Yes I've also heard that banks require 35% for newcomers (even if you don't have credit).

Sample calculation for mortgage:
Assuming you're looking for a property of $1M as you mentioned, putting in $350,000 would make your mortgage balance approximately $750,000. On a 4 year fixed rate mortgage, monthly payment would be about $3,450, which you would have to cover. Also, for such a large principal amount ($750,000), even if you have good credit transferred from your previous bank but no secure job, the bank would still look at your ability to pay the first year's mortgage payments (meaning do you have bank balance to cover that amount). One of my colleagues is a mortgage broker and he mentioned this when we were working with a joint client. I used the TD Canada Trust Mortgage Calculator (https://tools.td.com/mortgage-payment-calculator/) for the calculations.

Alternatively, if you are buying a property outright for $350,000 you wouldn't have to worry about mortgage or monthly payments. But in that case, depending on where in the city you are looking, you'd likely get a smaller property. The average price of a condo apartment in Toronto and area is $437,281 (check the Toronto Real Estate Board report here: http://www.trebhome.com/market_news/condo_report/ ). Likely you would still have a mortgage, but it would be much less. However, yes there are still properties you can get for $350,000 purchasing outright without any mortgage in parts of the city and GTA.

In the end, it depends on what is best for your personal financial situation and also for your family (house vs. condo, being in the City of Toronto vs. in the suburbs, etc.)

Let me know if I can help in any way.

Best of luck!