You can still use the following sources to purchase a home with 5% down payment instead of the traditional savings accounts
Unsecured Line of Credit
Credit Cards
Personal Loans
Mortgage Transfers: You can still transfer your existing insured mortgage to another financial institution with remaining amortizations greater than 25 years. Existing term and amounts can not be increased
New to Canada: There are many options for new to Canada individuals to obtain financing on a new home purchase.
People who work on Visa’s and landed immigrants who are employed
If you have been employed for a minimum 3 month period you can qualify for up to 95% financing on your new home as long as you can provide proof of strong international credit reports OR can provide 1 year of timely payments on 2 alternative sources like cell phone, utilities, rent, cable etc… You can only borrow against a residence that will be your primary home.
With 5% down the funds must be from non-borrowed sources which will require 90 days bank statements to show the accumulated savings/investments. The lender wants to confirm that any large deposits can be properly tracked to the source.
We would also need to see a letter of employment, most recent pay stub and confirmation of landed status.
Non-landed immigrants who are employed
If you have been employed for the minimum 3 month period and can meet the same credit guidelines as above you can qualify for up to 90% financing on your primary residence. Keep in mink you are limited to purchases only (not refinancing) and to a single unit primary home. You may also need to show that you have at least applied for landed status.
New immigrants who are not yet working but have applied for, been granted, or have landed immigrant status
If you are not employed and have applied, been granted or have secured landed status you can still borrow between 65% and 75% of the value of a home (provided of course that you can still show strong credit from example above) As an additional condition, the banks will also want to see that you have liquid assets equal to at least 6 months of mortgage principle, interest and property taxes. If you are wanting 75% financing you must be able to show additional liquid asset equal to 25% of the purchase price of the home (once again, this is only for a primary residence)
Be sure to educate yourself. Work with someone who will teach you about your options to ensure that you are getting the proper advice. Blind trust can be a very expensive mistake. We are here to make your first experience with Canadian mortgages a very positive one!
