One of the most common fears I hear is "I haven't been in Canada long, my credit history is too short, I probably don't qualify." The reality is that banks have specific paths for this, as long as you know what documentation to present. Here's how it works.
Programs like CMHC's newcomer program generally require that at least one of the buyers have a minimum credit score of 680. If your Canadian history is short, what changes isn't whether you can qualify, but which documents you use to show that you're a reliable payer.
If your down payment is between 5% and 9.99%, you can use an international credit report showing a good score, or proof of your rent and utility payment history (gas or water, for example).
If your down payment is 10% or more, banks will often accept six months of bank statements, or a reference letter from your financial institution in Canada.
If you don't have any Canadian credit history yet, and you're coming from countries like the United States, the United Kingdom or South Africa, some banks can review your credit history from that country directly. If you're coming from another country, you'll usually need a reference letter from your home bank.
While you decide whether to buy soon or wait a bit, there are steps that speed up your Canadian credit history. Opening a credit card and paying it in full every month, keeping your credit utilization low (using less than 30% of your available limit), and always paying on time are the fastest ways to build a solid history, even in just a few months.
Many of my clients wait years thinking they need a spotless history before trying, when in reality they already had what they needed with the right alternative documentation. The best move is to get pre-qualified with our mortgage broker before ruling out the option, to know exactly what documents you need in your specific case.
Newcomer programs usually ask for a minimum of 680 from at least one of the buyers.
It depends on the country. If you're coming from the United States, the United Kingdom or South Africa, some banks review it directly. From other countries, a bank reference letter is generally required.
It varies by program and your immigration status, which is why it's important to review your specific case with our mortgage broker.
If you want to know exactly which documents you need for your situation, send me an email with your question at contact@nataliarendon.ca, or I'll see you at the free seminar "From Renter to Homeowner: How to Buy Your First Home in Canada".