“Canadian Non Resident Mortgages Are Slightly Different To Arrange Than A
Canadian non resident mortgage financing options are available through most banks and other institutional lenders as well as private mortgage lenders.
For the most part, the process for securing a mortgage for someone who is a non resident of Canada, but wants to secure a mortgage against Canadian property they own is very similar to what a Canadian citizen would go through for a residential home mortgage with a few key differences.
First of all, in terms of the amount of financing you can get, bank and institutional lenders will provide up to 65% of the value of the property where a conventional mortgage can go as high as 80% under an uninsured mortgage program. There is no insured mortgage loan programs for non residents.
High loan to value mortgages can be secured through private mortgage financing sources who will consider applications for Canadian non resident mortgage financing up to 75% of the property value. Because private mortgage lenders are basically providing a home equity mortgage, the non resident mortgages can be a great fit for them.
Second, there is a higher need for third party verification of income, net worth, and credit rating for non residents than for Canadian citizens residing in Canada.
For credit, this can include getting a letter of reference from your foreign bank and potentially providing a third party credit profile from a acknowledge credit rating source that provides the service in your country of residence. While in most cases this is a very straight forward information request, there can be delays due to your foreign bank not having forms or procedures already in place to deal with this, or complications/delays can occur due to language and translation.
Income and net worth verification will also be more comprehensive compared to what is conducted for a typical Canadian resident mortgage. Once again, this will not necessarily delay the transaction as long as you are prepared in advance to provide the additional documentation when requested.
Third, while you can complete the application process from outside the country, you are required to travel to Canada for the mortgage closing process. This can no longer be accomplished by a power of attorney.
On average, the time to closing for a Canadian non resident mortgage tends to be one week longer than for a resident mortgage.
If you would like to better understand your options as well as the process to secure a Canadian non resident mortgage, I recommend that you give me a call so we can go over everything together.