Mortgages for non residence of Canada can be arranged through a wide variety of Canadian mortgage lenders, which is good news for non residence that are looking to finance a Canadian real estate property.
And the rates and terms that can be secured can also be very attractive. The only major financial requirement is that the down payment or equity in the property is between 35% and 50%. Credit and cash flow for repayment will enter into the equation for better rates and terms, but the most important funding requirements is going to revolve around the equity.
So from an application and approval point of view, the process can be fairly straightforward to complete.
What can be more challenging is getting the mortgage agreement completed and the funds disbursed.
Canadian lenders will only be working in Canadian funds and the payments made will need to flow through a Canadian bank account.
So a non resident would have to set up banking in order for the cash flow requirements of the loan or mortgage to be met.
In addition, most if not all lenders in Canada that will fund mortgages for non residence will require the actual borrower to sign the mortgage documents prior to funding.
Powers of attorney for instance will not be acceptable to complete the process.
This will typically require the borrower to need to travel to Canada at the time of closing to execute all the documents in person.
Another procedural requirement can be that all correspondence related to the mortgage will be conducted through the borrower’s solicitor to ensure a proper and complete communication record is available to the lender.
This provides the bank with a certain amount of protection against fraud and improper representation of the information required to complete the process.
Because of some of the added procedural requirements for a non resident mortgage application, the time to complete the application and funding process will be slightly longer than for a Canadian resident and should be built into the process by the applicant.
The best way to efficiently manage the mortgage process from beginning to end is to work with an experienced mortgage broker who has successfully placed non resident mortgages for his or her clients.
If you are looking into mortgages for non residence of Canada, I suggest that you give us a call so we can go through your requirements together and discuss the different mortgage options available to you.