Buying property in Canada - mortgage chains
 

Hello,

We are looking to move to Canada in a few years and are on a bit of a fact finding mission to plan! Wondering if anyone can help us with the following questions:

1. Is there a way of being in a chain (like in the UK) with a property in Canada e.g we can put an offer in on a property before ours is sold? (Sorry if this is a stupid question).

2. Can we get a mortgage on a property in Canada (to be our main residence) based on the current jobs we held in the UK (so if we bought the property in Canada with a mortgage and stayed with family in the UK until we were ready to move out) we will have AT LEAST a 50% deposit.

3. If we can’t do 1 is there anyway of doing a temporary let in Canada whilst buying a property?

Some context, we will be moving out to Canada in the August to allow for our son to start school in the September. We have a property to sell in the UK and would like to buy in Canada to save throwing money away on long term rent and also we have two cats and a dog coming with us. We need to find a viable way to move in case the house sale and moving don’t line up....

Any help would be greatly appreciated!

Re: Buying property in Canada - mortgage chains
 

Welcome to BE.

I recommend you take a look in the Canada Section of the BE Wiki. There is a link to this at the top of the page. For some reason I cannot access it at the moments or I would post a link. Hopefully it is an ipad problem. If you have a problem accessing the Wiki, please let me know and I will report it.

Re: Buying property in Canada - mortgage chains
 

Thanks so much. Can’t seem to find the answers to these questions in there though!

Re: Buying property in Canada - mortgage chains
 

I can’t help you with a mortgage, but I am sure someone will come along soon who will be able to help.

Yes you can rent while you are waiting to buy. It is actually a very good idea to do so rather than jumping in the property market too soon. It gives you time to reccie the various areas/schools/transport etc. Many rentals are for 12 months, but you can negotiate this. Buying and selling property is much more expensive site than it is in the UK...think approx 5-6% realtor fees. :eek: So it could prove an expensive mistake if you have buyers remorse.

Buying property is very different to the UK. If you see a property you like you put in an offer...if you delay you may miss out (this happened to us once). If it is accepted a deposit is required immediately, you sign the paperwork and it is legally binding, unless something crops up that hasn’t been disclosed.

Edit: if you have buyers remorse here and you have made a profit on your property...the profit is liable to income taxes.

Bear in mind property taxes are included in the rent...you are not liable for them.. They can amount to several thousand a year. The cost of property taxes depends on where you live and the value of the property

Re: Buying property in Canada - mortgage chains
 

To add to JG's wise words, you can't use your UK income for a Canadian mortgage if you'll be moving there. As JG said, best to rent for a while anyway to work out where you want to be and save any pricey mistakes.

You say you'll be moving in a few years, so hopefully plenty of time to sort out an area and a rental, then explore where you'd like to buy. If you're eligible for a visa now, I'd recommend you apply asap, in case the rules change between now and then (unless of course you already have PR or are citizens, in which case ignore me!).

Good luck and welcome to BE.

Re: Buying property in Canada - mortgage chains
 

Also it doesn’t matter how long you spend here before actually moving...it is nothing like actually living here. So buyer beware! ;)

Re: Buying property in Canada - mortgage chains
 

Good sound advice thank you so much. We really would like to rent but there doesn’t seem to be many we can get that would allow two cats and a dog! Plus us three as well. All the condos seem to be ok with one pet but not three!

Re: Buying property in Canada - mortgage chains
 

We thought the same, but when the time came, most were happy to make an exception to their stated rules so you may find the same. Just ask nicely and offer a higher deposit if needed! As I've just said on your other thread, as you're only moving on a temporary visa, I would strongly advise you don't sell your UK home or buy in Canada until you know you can stay (and if you sell in the UK you may find your study permit is refused).

Re: Buying property in Canada - mortgage chains
 

Pets can be a problem when renting and limit your choice. Most condo buildings here in Toronto have pet restrictions, ie number of pets, weight, breed etc. Houses will be subject to the landlord’s discretion or city/province rules.

Re: Buying property in Canada - mortgage chains
 

Where we live, there’s a lot of turnover on houses - people seem to sell their house, with say a 90 day closing date in the future, then commit on the house they’re buying. I think it’s a far slicker system than we’re used to in the UK - both parties are committed early in the process and that’s it. Canadian friends can’t understand how it can work in the UK - and frankly I struggle to see the logic now too.

Re: Buying property in Canada - mortgage chains
 

In the UK, until contracts are signed and at such time the deposit is made, neither party can rely on the sale going through. It is normal for the signing of contracts to take several months, although it can be done in days/weeks. In Canada it is a swift, cut and dried process. Both parties know exactly where they stand once the sale has been agreed.

Re: Buying property in Canada - mortgage chains
 

First thing to determine is if you can qualify for any route to get a Temporary Work Permit or Permanent Residence in Canada.. without that, there would be no point in buying property (we don't recommend buying on a TWP, as there's no guarantee of remaining in Canada on one)..

1) Canada works on a principal similar to Scotland - when you make an offer it's legally binding, your 'chain' wouldn't work.
2) You can't usually obtain a mortgage from a Canadian Mortgage Lender on jobs held in another country - you may struggle to get a mortgage with jobs IN Canada, initially.
3) Yes, you can rent a property and we recommend that you do until you determine whether you like the area. The school your child will attend is determined by the catchment area you live in.. something to keep in mind if you don't want to move them from one school to another

In order to apply for PR in Canada (without a job or Canadian experience) you may have to show the minimum required settlement funds - from when you apply to when you 'land' as Permanent Residents.. so you may want to check that you have this without selling your property in the UK (which won't count until the sale proceeds are cleared funds).

Our wonderful Wiki covers many things.. keep digging :)
https://britishexpats.com/wiki/Mortgages-Canada
https://britishexpats.com/wiki/Category:Housing-Canada

also> https://www.cmhc-schl.gc.ca/en/buying

Re: Buying property in Canada - mortgage chains
 

Best advice I can give you is rent for a year or two until you know precisely WHERE you want to live. In that time you can build a credit history in Canada, which is vital when trying to get a mortgage. Get as many credit cards as you can when you arrive to establish your credit history. Take out a mobile contract as well will help your credit score. After a few months ask for your credit limit to be increased. Make sure you pay off 100% of any debt on your credit cards and keep a low utilization rate. e.g. Credit card limit is $4000, but you only spend $1000. This will help with your credit score. Buying and selling a house is expensive in Canada. It is better to find the right house and live in it for at least 10 years.

Re: Buying property in Canada - mortgage chains
 

I tried to explain the English property buying / selling system to my Canadian Realtor. He simply could not understand it at all! Things like him saying ' you mean you make an offer to buy a house but then you can pull out at any time for no reason??!! That's CRAZZEEEEE!

Re: Buying property in Canada - mortgage chains
 

it is crazy, the problem as a Canadian Realtor is trying to explain the situation to British buyers who think they can offer for 2 or 3 properties at once and then choose the best deal.and back out of the others. Actual Canadians don't always explain it because they don't know the expectations of the British buyer.