Toronto: Buying your first home in Canada can be a challenging experience. As a newcomer who may not understand the mortgage process in Canada, it can be even more so. Many newcomers don’t understand the nuances, and have certain preconceived notions that don’t always hold true, like requiring a credit history to obtain a mortgage.
According to a recent poll from the Royal Bank of Canada, 56 per cent of newcomers to Canada believe a Canadian credit history is required in order to get a mortgage in Canada. This is a myth that many believe, but the reality is much brighter for newcomers, and easier than many people may think.
“Newcomers to Canada who have been in Canada less than five years no longer require a credit history for an RBC mortgage,” said Christine Shisler, director of multicultural markets at RBC. “We listened to the needs of newcomers and made some enhancements to our policies at RBC this year to make it easier for newcomers to get settled in Canada. The change to our newcomer mortgage program gives people more time to qualify and more time to save for their down payment.”
Shisler’s three tips for potential homebuyers:
1. Get pre-approved
When you are pre-approved for a mortgage, you can shop for a home with confidence. Meet with a mortgage specialist before you tour open houses – you’ll have a clearer picture of what you can afford and that will take some of the stress out of the home buying process.
2. Know the hidden costs
Beyond the mortgage amount, legal fees and land-transfer taxes are common examples of costs that often aren’t accounted for when purchasing a home. Speak to a mortgage specialist to make sure you know all the associated costs.
3. Keep your total budget in mind
Allow for a little wiggle room so that you’ll have some funds in reserve for ongoing home ownership costs, your lifestyle needs and any unexpected expenses that may arise.
The poll also showed that many newcomers (44 per cent) don’t know which products are right for them, which Shisler said is one of the main reasons that newcomers should come into an RBC branch and talk to a financial advisor or a mortgage specialist. A financial advisor will be able to provide the best advice and roadmap to get you where you’d like to be in purchasing your first home in Canada. For more information visit www.rbc.com/settlequick.