With all the changes to mortgage rules it can get confusing for Non-Resident home-buyers to know if they can qualify for a mortgage and how much money they have to put down. Here is a simplified example to help…
Joe is a non-resident of Canada and wants to buy a condo in Vancouver. He is considering what he can purchase without using too much cash for a down payment. Since Joe is not a permanent resident or a temporary resident on work visa, his options are very clear:
Min down payment as a non-resident home-buyer is 35% and (qualification based on income/debt servicing)
Rates will not be fully discounted
Min down payment of 50% and no income requirements
Joe prefers to have the property in his own name but isn’t sure he wants to invest that much into a down payment. He has a daughter, Anna who lives in the Fraser Valley and is a permanent resident. She is employed and (based on qualifying) could buy the condo with 5% down or purchase as a rental with 20% down. If his daughter already owned a home the new purchase could be a second home (depending on location). The down payment can either be gifted (depending on the lender) or we must show proof of the down payment in her account for 90 days.
All down payment funds coming from an offshore account must be in Canada 30 days before funding or deposited in a Canadian bank at origin within 10 days of funding to meet the Canadian government anti-money laundering laws.
If Joe chooses to have his daughter on title he wants to be sure of his legal rights as he can’t be on title to the property. I recommended he speak with an experienced lawyer who specializes in immigration and real estate law. One company in Vancouver is Bell Alliance Law www.bellalliance.ca/non-residents. Also – if Anna purchased the home as owner occupied she may qualify for the First Time Homebuyers exemption on property purchase tax. Details on qualifying for the exemption can be found at www.bellalliance.ca/first-time-buyers.
For more information on mortgage financing or to sign up for regular blog posts directly to your email – contact me at pauline@mybcmortgage.ca.
Pauline Tonkin
Mortgage Specialist
Innovative Mortgage Solutions
www.MyBcMortgage.ca Cell: 604.813.8402