New comers to Canada scheme?

Question

Hi guys,

I've recently stumbled across a newcomers to Canada scheme from a company called Genworth, has anyone had previous experience with this?

Apparently I can get a duplex (max) as long as I reside in one side for a certain period, for 2.4% at a 25yr 95%LTV... Too good to be true?

Roy N. · Answer

@Phillip Johnson

There are private lenders.  But accessing them {directly} in parts of the Maritimes may be a test.  I moved here in the late 1970s and some still consider me to be "from away".

There are mortgage brokers who will match borrowers with private lenders (for a small piece of flesh), so you can always go that route.

As with any business, once you scratch out a bit of a record, money will not be as difficult to find.

Phillip Johnson · Answer

@Roy N.

Thanks for the reply.

The reason I feel like they'd be a great choice is because they except an equifax credit report from the last country of residence and are lenient on current credit score for newcomers... Or at least that's what they make out? The last thing I want to do is wait two years after I get to Canada to start investing.

I didn't realise that 90% was fairly standard for 3-4 unit property... That's pretty good news haha.

A quick one Roy, if the conventional lending goes down the drain for the first couple of years due to newcomers credit history, are there many private lenders around the NB/NS area?

Thanks in advance.

Roy N. · Answer

@Phillip Johnson

That's not a scheme for newcomers to Canada - even if you read marketing copy which says so.

High ratio mortgages, insured by CMHC (or Genworth or Canada First) can permit LTVs up to 95% on 1 - 2 unit residential properties and 90% on a 3 - 4 unit residential.

While you may get an interest rate of 2.4% (which you would also get if you have good credit), you will pay an insurance premium of 3.6% on the principal of the mortgage.  Viz, if your mortgage is $100,000.00, $3600 in insurance premiums will be tacked onto the amount you borrow (and you will pay interest on the insurance premium).