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How many years credit before buying house?

How many years credit before buying house?

Old Jul 24th 2020, 6:28 pm
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Default How many years credit before buying house?

Hello. We’re moving to Ontario next summer. Does anyone know how long you have to build up credit history to get a normal mortgage? (Not a “newcomers mortgage” - we don’t have the 35% downpayment needed for that). Also, is there any way they can use our credit history in the UK? Thanks in advance.
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Old Jul 25th 2020, 4:54 am
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Default Re: How many years credit before buying house?

Originally Posted by Anya121 View Post
Hello. We’re moving to Ontario next summer. Does anyone know how long you have to build up credit history to get a normal mortgage? (Not a “newcomers mortgage” - we don’t have the 35% downpayment needed for that). Also, is there any way they can use our credit history in the UK? Thanks in advance.
You need a lower downpayment for a 'Newcomer' Mortgage than a normal one. Not sure where you got the 35% figure from.. it's 5%! . Are you getting the downpayment confused with the maximum debt to loan ratio of 35%, perhaps?

Qualified homebuyers who have immigrated or relocated to Canada within the last 5 years are eligible under Genworth Canada’s New to Canada program to purchase a property with as little as a 5% down payment.
New To Canada Program - Products - Genworth Canada - Homeownership
Have a read over the link - lots of info on how to prove your credit worthiness

More useful info on alternative ways of showing your credit worthiness on this pdf (opens in new tab, no download) from CMHC - https://assets.cmhc-schl.gc.ca/sf/pr...0-d898545f3dce

Take a look at our wiki for more info https://britishexpats.com/wiki/Mortgages-Canada

Last edited by Siouxie; Jul 25th 2020 at 5:03 am.
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Old Jul 25th 2020, 10:36 am
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Default Re: How many years credit before buying house?

[QUOTE=Siouxie;12886929]You need a lower downpayment for a 'Newcomer' Mortgage than a normal one. Not sure where you got the 35% figure from.. it's 5%! . Are you getting the downpayment confused with the maximum debt to loan ratio of 35%, perhaps?


Thanks for this Siouxie. It's encouraging to hear that some places will give newcomers a mortgage for more normal downpayment rates. I don't know Genworth. Are they a household name?

It says 35% downpayment for newcomers to Canada on the websites for Royal Bank of Canada (RBC), HSBC, CIBC and Moving2Canada.com where it says this:
  • Option 3 – 35% down payment – $262,500 for a house costing $750,000
    This is the down payment percentage required by some banks for newcomers to get a mortgage before they have established a credit history in Canada.
RBC says "If you are just starting out and do not have a credit history in Canada, you may qualify to obtain a mortgage if you have a down payment of 35% or more."

We are planning to rent for one year, just to make the transition a little easier. But I don't know if one year's worth of credit history is enough to qualify for a normal mortgage rather than the newcomer band. Somehow I doubt it. But it's good to hear that there are other newcomer options besides the 35% bank mortgages I read about. Selling our lovely little home in the North East for pennies and trying to buy in Toronto is going to be impossibly expensive as it is without a 35% downpayment, which is completely out of our league.

Many thanks for your help. If anyone else has experience of getting a mortgage as a newcomer, I'd love to hear about it. Many thanks!
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Old Jul 25th 2020, 11:17 am
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Default Re: How many years credit before buying house?

Sadly this applies to all newcomers and even people born here. Many can not afford to buy a house due to numerous factors and lending institutions are governed by laws and use a risk assessment to see if they should lend you money.
If you are indeed moving to Toronto or the GTA where housing is expensive then you might be in for a surprise.
Now without asking for personal details you really have to look at your position.
You have sold your house in the UK and have X amount from the sale as well as any savings, investments or other that you might have accrued. Sensibly you are choosing to rent for the 1st year before looking at purchasing.
So in 1 years time will you be in a position to buy or consider purchasing a home?
In that 1 year timeframe how much do you have saved? Are you employed and what is your income? Do you own vehicles and are they paid for or leased/financed?
Now you can choose to do your own research or believe what is written in any publication about the cost of homes in the GTA.
The average home in the GTA is predicted to be $900,000 in 2020. Well we all know that not to be totally true but many on here who live in the GTA will tell you buying a home is expensive.

https://torontosun.com/news/local-ne...-in-2020-trreb

https://www.zolo.ca/toronto-real-estate/trends

https://www.cbc.ca/news/canada/toron...ales-1.5237143

Unless you and your partner are making good money then personally I think you are mad wanting to live in the GTA especially now. Yes others moved here years ago but that was then and this is now. In my case I am single, kids all grown up and work for the Federal Govt earning what I think is a decent income of just over 80K gross. There is no way I would consider moving to the GTA even if I wanted to transfer and earn the same income.
Others will disagree but hey its your choice.
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Old Jul 25th 2020, 11:46 am
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Default Re: How many years credit before buying house?

Thanks for this. I appreciate it. However, for me this is actually moving back home (after 20+ years - all of my adult life - in the UK) to spend more time with my family, especially as my parents start to age.

I know the ridiculous cost of housing in Toronto/GTA, where my family and friends live, but needs must. So it's just finding ways to curb this as much as possible.

I really hope we don't have to spend years building up a credit history before we can buy. That's why I'm looking for advice on credit history. I'd love to know if there is any way for banks / mortgage lenders to use our UK credit history. Or if there are people out there who did manage to get mortgages for less than the 35% downpayment I read about for newcomers with little or no credit history.

Thanks so much.
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Old Jul 25th 2020, 6:48 pm
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Default Re: How many years credit before buying house?

For anyone else interested in this issue, this article is very helpful:

https://www.theglobeandmail.com/repo...ticle35156673/

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Old Jul 25th 2020, 6:49 pm
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Default Re: How many years credit before buying house?

Originally Posted by Anya121 View Post


Thanks for this Siouxie. It's encouraging to hear that some places will give newcomers a mortgage for more normal downpayment rates. I don't know Genworth. Are they a household name?

It says 35% downpayment for newcomers to Canada on the websites for Royal Bank of Canada (RBC), HSBC, CIBC and Moving2Canada.com where it says this:
  • Option 3 – 35% down payment – $262,500 for a house costing $750,000
    This is the down payment percentage required by some banks for newcomers to get a mortgage before they have established a credit history in Canada.
RBC says "If you are just starting out and do not have a credit history in Canada, you may qualify to obtain a mortgage if you have a down payment of 35% or more."

We are planning to rent for one year, just to make the transition a little easier. But I don't know if one year's worth of credit history is enough to qualify for a normal mortgage rather than the newcomer band. Somehow I doubt it. But it's good to hear that there are other newcomer options besides the 35% bank mortgages I read about. Selling our lovely little home in the North East for pennies and trying to buy in Toronto is going to be impossibly expensive as it is without a 35% downpayment, which is completely out of our league.

Many thanks for your help. If anyone else has experience of getting a mortgage as a newcomer, I'd love to hear about it. Many thanks!
Genworth MI Canada Inc. (TSX: MIC) through its subsidiary, Genworth Financial Mortgage Insurance Company Canada (“Genworth Canada” or the “Company”), is the largest private residential mortgage insurer in Canada.
All the banks will give you access to the Newcomer Mortgage - those links were just so you could see how the Newcomer Mortgage works and what alternative means of proving your credit worthiness will be accepted.

I strongly suggest you use a broker rather than going direct to the banks My son and I used a broker, he was able to obtain funding from an alternative lender at a lower rate than the banks were offering - and yes, for a Newcomer Mortgage
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Old Jul 26th 2020, 9:15 am
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Default Re: How many years credit before buying house?

Siouxie, That's brilliant. Thank you so much. I'm so very relieved to hear this! Wonderful news, and quite a relief. I'll definitely look into brokers too then when the time comes; thanks!

Thanks so much for all of your help!
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Old Jul 31st 2020, 2:59 pm
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Default Re: How many years credit before buying house?

I bought a house 1 year ago in Canada after 1 year working here with 10% down payment. I could have put 5% down but chose not too. I supplied by UK credit scores and they were accepted, my girlfriend had her job for around 1.5 years at the time but she was on a pretty low wage. Be careful when buying, they offered us around 700k but the house I bought was in the 400s. Canadians seem to love debt and their institutions seem to love feeding that habbit.

Thing may have changed with Covid as I know UK mortgage providers are asking for additional information or higher downpayments.
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Old Jul 31st 2020, 5:09 pm
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Default Re: How many years credit before buying house?

We moved in November and bought a house on New years eve with a 20% deposit.

We have a very helpful bank manager who organised it for us
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Old Jul 31st 2020, 5:20 pm
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Default Re: How many years credit before buying house?

Originally Posted by Richb1970 View Post
We moved in November and bought a house on New years eve with a 20% deposit.

We have a very helpful bank manager who organised it for us
Similar, RBC were extremely helpful, moved in mid February 2018 and had the keys to our house in 1st May, with 20% deposit and could have paid a smaller deposit but would have had to buy some kind of mortgage insurance, that was all.
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Old Aug 1st 2020, 4:57 pm
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Default Re: How many years credit before buying house?

That is wonderful news. Very helpful. Thank you all!
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Old Aug 2nd 2020, 12:42 pm
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Default Re: How many years credit before buying house?

Originally Posted by Siouxie View Post
I strongly suggest you use a broker rather than going direct to the banks My son and I used a broker, he was able to obtain funding from an alternative lender at a lower rate than the banks were offering - and yes, for a Newcomer Mortgage
That's good advice for a first home purchase for a recent immigrant.

In general, dealing with a competent mortgage broker brings two things to the table:
- Familiarity with loan products, loan costs, and loan eligibility requirements from a wide "panel" of potential mortgage lenders, including all of the major banks, plus second-tier lenders who provide no-frills mortgages potentially at lower cost, plus specialist lenders who deal with business loans, or various issues with credit impairment.
- Familiarity with the detailed documentation requirements of each lender for each product.

But I'd offer two pieces of advice.
  • First, just as you'd shop around to more than one lender, if you did this on your own, check out your mortgage broker carefully, and interview more than one before making any final call. In particular,
    • Get details on the breadth of the lender panel that the broker can represent.
    • Get details on how the broker is remunerated by each potential lender.
    • Don't allow any loan application--or even any preliminary credit check--to go forward until you're satisfied with those answers.
  • Second, learn at the feet of the mortgage broker as your application moves forward.
    • You can actually do this all yourself, the second time around.
    • There are some (quite legitimate) internet-based lenders who offer the very best rates to direct applicants for very "clean" loans (clean credit, low LVR, all income / household costs documentation readily provided). This DIY path is cheaper because it avoids the mortgage brokers' costs. But, you have to be confident in your ability to shop around for the best loan rates yourself, and to provide all appropriate documentation without much hand-holding.

Last edited by abner; Aug 2nd 2020 at 2:23 pm.
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Old Aug 2nd 2020, 12:53 pm
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Default Re: How many years credit before buying house?

I'd personally wait a while, perhaps one year once the Corona dust settles. The GTA market seems to be propped up by mostly Canadian buyers. Overseas buyers seem to be staying away these days. And then there is also the fiscal and economic impact of Corona which is unprecedented. It would surprise me very much if this wouldn't have any kind of downward impact on the GTA property market.

For immigrants in the process of moving money to Canada, there is also the question on the value of the Loonie. The currency seems to have dropped quite a bit towards international currencies, interestingly also the Euro.
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Old Aug 2nd 2020, 2:19 pm
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Default Re: How many years credit before buying house?

Originally Posted by OrangeMango View Post
I'd personally wait a while, perhaps one year once the Corona dust settles. The GTA market seems to be propped up by mostly Canadian buyers. Overseas buyers seem to be staying away these days. And then there is also the fiscal and economic impact of Corona which is unprecedented. It would surprise me very much if this wouldn't have any kind of downward impact on the GTA property market.
The OP's thread is about the timeframe for obtaining mortgage credit after emigration, and while no definitive answer is possible (no details were provided--or expected--in relation to income, security of income, expected household costs, available down payment, expected purchase price range, etc., etc.), I think the general expectation for eligibility would be in the 6 - 12 month range after establishing secure employment in Canada, if all the other figures line up in a realistic fashion. YMMV, especially in 2020, and all that.

In relation to the OP's thread title, that's probably faster than the OP expected.

Whether the OP *should* act as fast as a mortgage might become available is a different matter, and your "Corona-dust"-settling point is well-taken, though I think it will be exquisitely difficult to time the bottom in the GTA housing market, in these unprecedented economic circumstances.

The OP already intends to rent for a year, to (re)acclimatize to local circumstances, and that seems eminently sensible in any event, even if mortgage eligibility is nailed down somewhat earlier than that.
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