Whether the bank approves the mortgage loan depends on the applicant's repayment ability and willingness. For new immigrants who find jobs immediately and have income, if the down payment is higher than 20% of the house price and there are no other family debts, the loan amount is 5-6 times the annual income before tax at the current interest rate; If the down payment is less than 20% of the house price, the loan amount is 4-5 times of the annual income before tax, and the minimum down payment ratio for self-occupation is 5%. Most new immigrants can't find jobs soon. Without income, new immigrants who have landed for five years can apply for a mortgage loan with a down payment of 30%, and there is no need to verify their income. As for the willingness to repay, financial institutions in Canada rely almost entirely on the applicant's credit history report to judge. Borrowers with serious bad credit records are usually rejected. It is normal for new immigrants to have no credit history. For example, if you borrow money to buy a house within half a month after landing, of course, there won't be too many credit records, as long as the borrower has no bad credit records.
Judging from the process of buying a house, the first step for every buyer to start buying a house is to apply for pre-credit in the bank, that is, to complete the loan application before seeing the house and signing the house purchase contract. This has three advantages: to ensure that there is no problem with the credit record, there is no undiscovered debt that has not been repaid in time, and the credit record has not been ignored; Lock the current interest rate; Know how much money you can borrow. 1. After obtaining the bank's pre-credit documents, consumers can add their down payment to the loan amount to determine the target house price. 2. If the property is delivered within the interest rate lock-up period, the lock-up interest rate can be applied. Usually, the interest rate lock-up period is 90- 120 days. 3. If you find problems with your credit record when applying for pre-credit, including being cheated and finding that you have outstanding debts, you need to take immediate action to remedy them.
Canadian commercial banks have different requirements for the down payment of house purchase. If the down payment of the borrower is less than 20% of the market value of the house, the commercial bank needs to buy mortgage default insurance, and the premium shall be borne by the applicant. All banks have the same requirements. As for the source of down payment and the time of deposit, each bank is different. Some banks need to check the bank transaction records in the last three months, and some banks require the source of the down payment. For many new immigrants, these requirements are difficult to meet. If you buy a house just after landing, you can't provide a three-month statement. Due to China's foreign exchange control (each person remits the equivalent of 50,000 US dollars per year), it is difficult to prove that a large amount of money remitted from China comes from the borrower's own account in China. BMO's requirements in this respect are reasonable. When the borrower applies for a mortgage loan, it is not required that the down payment has been prepared in the account, as long as the down payment is deposited in the bank account in Canada before the house is delivered, and there is no additional requirement.
After signing the house purchase contract, the customer who applies for pre-credit needs to submit the sales contract to the bank and turn the pre-credit into formal approval. Consumers who sign a sales contract without applying for pre-credit will set a reservation when signing the contract, that is, if they can't get the mortgage loan approval within 5 days, they have the right to cancel the purchase contract and withdraw the purchase deposit. What needs to be reminded is that even if the bank formally approves it, it may eventually refuse to lend or change the loan amount. The problem usually lies in the housing situation and income. The appraiser entrusted by the bank found that the transaction price seriously deviated from the market value of the house, and the loan amount will be re-approved according to the evaluation price. If the house is illegally rebuilt or marijuana is planted, the bank can even refuse the loan. When the applicant submits an application, if the income mentioned is untrue or ultimately unverifiable, the bank will also change the loan amount or even refuse to lend money. Canadian banks are different from those in China. When approving a loan, it can be approved according to the information provided by the borrower, and then verified. Therefore, the speed of loan approval is usually very fast, which can be completed in one or two days, and then verified. Therefore, the accuracy of information provided by the applicant at the time of application is very important. For new immigrants who have no income, the procedure is very simple. The bank only needs to verify the landing time, down payment and house price, and the whole process can be completed in 3- 10 days.
The loan interest rate is divided into fixed interest rate and floating interest rate. Fixed interest rate means that the interest rate remains unchanged during the loan period, such as X%, and the interest rate is always X% from the first day to the expiration of the loan contract. Another kind of interest rate is floating interest rate, which is a parameter plus or minus X%. During the loan period, this parameter will change, but X% will remain unchanged. For example, P-0.3% means that P (the best interest rate) will change, but -0.3% will remain unchanged during the loan period. Floating interest rates are risky, but usually lower than the fixed interest rate for the same loan term.
According to whether there is a fine for paying off the loan and canceling the mortgage before the loan expires, the loan can be divided into open and closed types. If the borrower chooses an open loan, he can pay off the loan and cancel the mortgage at any time within the loan term, without penalty interest. If you choose a closed-end loan, as long as the loan is not due, you will be fined if you pay off the loan in advance and cancel the mortgage.
As can be seen from the above classification, Canadian mortgage loans can be divided into closed loans with fixed interest rates and open loans with fixed interest rates; Open loans with floating interest rates and closed loans with floating interest rates. Borrowers can choose according to their actual situation.
In Canada, the loan term is different from the repayment term. The borrower can sign a loan contract with the bank with a term of 1 year, but it can be expected to be paid off in 30 years, that is, the loan term is 1 year and the repayment period is 30 years. After the expiration of one year, the borrower can choose to pay off the loan in full, or renew the loan at the original bank, or borrow from other banks and return it to the original loan bank.
Consumer credit products related to mortgage loans also have home equity quotas. That is, the consumer credit line guaranteed by the home equity. This is a recyclable consumer credit product. Because the net value of the house is used as collateral, the interest rate is much lower than that of ordinary consumer credit products, such as car loans and credit cards.
Borrowers can choose their own mortgage repayment frequency, such as weekly payment, biweekly payment and monthly payment, with the longest interval being monthly payment. The shorter the interval, the more you can save interest expenses.
There are three kinds of insurance to be purchased when buying a house: loan default insurance, fire insurance (property insurance), life insurance and disability insurance. If the down payment exceeds 20% of the house price, you will not be required to buy loan default insurance in most cases. If you buy a house with a loan, you must buy the fire insurance of the real estate, because the real estate is the collateral of the bank loan. If the property has a management fee, and the management fee already includes the fire insurance premium, there is no need to buy it separately. As for life insurance and disability insurance, borrowers can choose insurance. If the borrower has purchased life insurance related to the mortgage loan, the insurance company will pay the loan balance in case of personal accident of the borrower. If the borrower has taken out disability insurance, the insurance company will pay the monthly loan contributions on behalf of the borrower during the period of disability to prevent work-related accidents.
In Ontario, real estate delivery is done through lawyers. After the loan is finally approved and all the loan conditions are met, the bank will clearly instruct the lawyer to lend money. After receiving the instruction, the lawyer will calculate the transaction cost of the borrower's real estate, notify the borrower to pay the down payment balance and handling fee to the law firm, and invite the borrower to sign the loan document in the law firm. After the borrower signs the formal loan document, the lawyer will send the demand instruction to the bank. When the property is delivered, the bank will transfer the loan to the trust account of the law firm, and finally the buyer's lawyer will transfer the full amount to the seller's lawyer account to complete the whole delivery work. The buyer will get the key to the new house and the seller will get the money to sell the house. It should be noted that the borrower signed the mortgage loan document in the law firm, not in the bank. In other words, only the loan documents signed in front of the lawyer are valid, and all the documents signed before are not formal loan contracts. Some applicants apply for mortgage loans at several banks at the same time, and finally there are several loan documents waiting to be signed in the law firm. The document of which bank the borrower chooses, and the final loan contract is signed with this bank.
In the absence of income, new immigrants can not only apply for mortgage loans for their own houses, but also apply for mortgage loans for investment properties, including mortgage loans for uncompleted flats. The down payment ratio will be higher than that of self-occupied mortgage loans. The mortgage loan of uncompleted residential flats can lock in the interest rate for up to three years, and can also lock in the status of new immigrants.
In addition to Canada's major commercial banks, some small and medium-sized financial institutions can also accept mortgage applications, and borrowers can apply through loan brokers. Some major commercial banks in Canada, such as Royal Bank (RBC), Imperial Commercial Bank (CIBC), Manco Bank (BMO) and HSBC, do not accept the agency of loan brokers.
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