The Genworth New to Canada Program and other Mortgage Insurance Products for Newcomers
Newcomers to Canada CMHC and Genworth insured financing is available to borrowers with permanent and non-permanent residence status, I help newcomers to realize their dream of homeownership in Canada.
The Program Features
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The New to Canada Program Requirements Include
- Down Payment: 35% is the required minimum down payment from one’s own resource. Down payment must be available in a Canadian Bank account prior to the Mortgage funding. Down payment cannot be in the form of a Gift and proof of funds for 90 days prior to financing is also required.
- Proof of Income: To prove income, a letter of employment from your current employer confirming length of time at the company, your annual salary including bonuses and confirmation that you are not on probation and your salary, are required. A recent paystub will also be necessary.
- Proof of Credit: If a Canadian Credit bureau is not available to you, than an international credit bureau or letter of reference from the bank you currently deal with, should suffice.
- Some lenders will require a year’s worth of Mortgage payment in a Canadian bank account before they will approve.
Benefits to Newcomers
- Access to Homeownership – Newcomers to Canada that have permanent residence status can purchase a home with as little as 5% down payment.
- Competitive Interest Rates – Access to CMHC insured financing, and as a result, competitive interest rates from many banks in Canada.
- Availability – Coast-to-coast-to-coast with no set maximum loan amount.
Nonresidence lending is a program for Canadians living abroad and non-Canadian Citizens that wish to purchase a property in Canada. This is specifically meant for a non-resident mortgage in Canada.
However, it is important to note that various lenders have restricted lending areas, and in some cases, certain lenders will not lend under this program.
Newcomer Mortgage Insurance FAQs
What are the new CMHC Rules?
With permanent resident status, newcomers to Canada have access to mortgage insurance, with a minimum down payment starting at 5%.
At least one borrower on the mortgage must have a minimum credit score of 680. If you have a limited credit history in Canada and don’t have a credit score from another country, it is possible to provide other sources of payment history. Examples of other sources are rent payments or three other types of payments from things such as utilities, TV subscriptions, childcare expenses and insurance payments. They will want documentation for the previous 12 months.
Down payments cannot be borrowed from other lenders but need to come from savings, the sale of another property or a financial gift from a relative that don’t have a repayment obligation.
What is Mortgage Default Insurance?
This is mandatory insurance in Canada for mortgages with less than a 20% down payment of purchase price. This insurance serves to protect the mortgage lender in case the borrower defaults on the mortgage.
While this often adds 3-4% to the cost of the mortgage, it allows many people to get homes faster rather than saving for a 20% down payment and also increases the security of lenders so that they can offer lower mortgage rates than they would if the mortgage market was more risky.
Who offers Mortgage Default Insurance in Canada?
There are currently 3 companies that offer mortgage default insurance:
- The Canada Mortgage and Housing Corporation (CMHC) – This is a crown corporation that is more or less the government providing an option for mortgage default insurance. The CMHC is often the main insurance people consider for Mortgage Default Insurance, but there are two private companies worth considering as well.
- Sagen (previously called Genworth Canada) is the largest private mortgage insurance provider in Canada. They have a number of programs and will likely come up on your radar if you’re looking at mortgage insurance.
- Canada Guaranty was formed in 2010 through the acquisition of another mortgage insurance company to become the only 100% Canadian-owned private mortgage insurance company. As the CMHC made their requirements for mortgage insurance stricter in 2020, both private providers declined to do so. As such, you’ll likely see good options from one of these two private providers even if you get declined from the CMHC.