New to Canada mortgages in BC: down payment, income, and credit explained

Getting a mortgage when you're new to Canada can seem really daunting and complicated. People who move to Canada want to set down their roots and purchase a home, but don't know where to start. It surprises many people, but getting a mortgage as a newcomer to Canada is a lot less complicated than it may seem. The qualification process and the terms available are nearly identical to what Canadian citizens experience. There are a few things you need to know as a newcomer wanting to get approved for a mortgage, and we cover them off here.

You typically don't have to wait. The fastest we've gotten someone approved has been 2 weeks, landed in Canada on a work permit. Everyone's situation is a bit different, though. If you are getting transferred internationally within your company, there are no minimum employment requirements and we can use your pay right away. We only need a pay stub in Canada and a job letter. If you're coming here and you're starting a brand-new job, lenders typically want to see 3 months of work history before you can get approved on that income.

From a residency perspective, there really isn't any waiting period that's required. If you have 6 months of banking history in Canada, we typically have an easier time satisfying the credit requirement.

The income requirements are also not very different from a Canadian citizen. You also don't need to be earning more to qualify for a mortgage than a Canadian would. If you are employed, you usually don't need to have filed your first income tax return in order to qualify for the mortgage. If you are self-employed, there are a few more boxes to check, and our page on self-employed mortgages walks through what lenders look for.

A new job is not a problem. You do not need two years with an employer to get a mortgage. What lenders want is a signed letter of employment stating your position, salary, and start date, plus recent pay stubs.

Probation can be a wrinkle.Many lenders have a policy that they won't fund your mortgage while you're inside a probationary period, but we get this waived all the time, especially if you moved into the same field you worked in before. If you're going from a construction job to a photographer, we may run into some issues. If you're staying within tech, the odds are very strong that the probationary period won't matter.

If your salary still comes from an employer abroad and isn't reported here, most lenders won't accept it without it being declared in Canada first.

If we have a 2 year history of the income being reported on Canadian tax returns, there's a good chance we use that foreign income. A few other factors include which country the income comes from and how easy it is to identify the employer.

This is the most common cross-border file we see in Victoria and on Vancouver Island.

The good news is that the two countries have very similar credit systems, it's very easy to trace funds, and US income is well received by quite a few lenders.

If you are moving to Canada from the US, and are working remotely for a US company, we can use your regular full time income, prior to you declaring it in Canada. Lenders will accept your W-2s, pay stubs and job letters, just like any regular Canadian mortgage file. We can even convert your salary from USD to CAD, which gives a significant boost to borrowing power.

If you have a very strong credit file, we can also count that towards your Canadian mortgage application. We use the same providers in Canada as we do in the US.

A bit of a double edged sword, we do have to include your American liabilities. This means any credit cards, vehicle loans, mortgages, and anything else down in the US must be included on your Canadian mortgage application.

Property transfer tax applies to every buyer: 1% on the first $200,000, 2% from $200,000 to $2,000,000, and 3% above that, plus a further 2% on any portion over $3,000,000. See the Province of BC's property transfer tax page.

The First Time Home Buyers' exemption can eliminate it, but you must be a Canadian citizen or permanent resident to claim it. This is the largest dollar difference PR status makes to a buyer.

The additional property transfer taxhits foreign nationals buying in the Capital Regional District, which covers Victoria, Saanich, Langford and the rest of Greater Victoria, at 20% of fair market value on top of the regular tax. Permanent residents and citizens don't pay it.

Budget for legal fees, an inspection, title insurance, and property insurance in place before closing. Most newcomers are also first-time buyers, so the full first-time buyer breakdown is worth reading alongside this.

We start with a 20-minute call. I'll ask about your status, your timeline, what you've saved, where that money is sitting right now, and who pays you.

From there I shop and match your file to the lenders who want your business. On newcomer files that matters more than usual, because policies on foreign income, probation, and alternative credit vary widely from one lender to the next, which is part of how brokers compare to going direct to a bank. If you're not ready yet, I'll tell you exactly what to fix and how long it takes. There's no cost for that conversation, and plenty of the people I talk to are six months out.

We work with newcomers across Greater Victoria and up Vancouver Island, and everything can be handled remotely while you're getting settled.