Common House Hunting Challenges for Newcomers in Canada
Getting ready to start shopping for your first home in Canada? Navigating the home buying process can be difficult for anyone, but new Canadians can face more challenges than others. Despite these hardships, it’s definitely worth it!
To help you in your journey, we’ve put together this list of some of the most common house hunting challenges for newcomers in Canada.
Understanding Your Home Buying Options in Canada
In Canada, you have a large number of options when it comes to buying a home. The choices are practically endless. First of all, many newcomers start their journey by renting for a year or two. While this doesn’t build up equity, it’s a good way to get your bearings and find an area where you really want to put down roots.
You’ll then have to decide whether you want a resale or a brand-new home. Some resale homes can be over a hundred years old (if you like that charm), but most resale homes tend to be 30 – 100 years old. They have low costs but usually need some kind of repairs.
Brand-new homes on the other hand are made just for you. They can be more expensive depending on the style you choose, but you have options to personalize the home to your taste. Additionally, you don’t have to worry about paying for any unexpected repairs for quite a while because, in Alberta, your investment is protected by a new home warranty.
Finally, you’ll have to look at the various types of homes. Some families buy condos or apartments, which have many units in a building. They are the most low-maintenance choice. Townhomes and duplexes have somewhat more privacy, but you do share walls with at least one other family.
With modern building techniques, this isn’t usually a big deal, and some large families even prefer this style so that they can stay close to the family. Detached homes – whether front or rear attached – offer the most privacy. They’re larger and have backyards for the kids and pets to play in.
Finding A Home That Fits Your Budget
Moving to a new country costs a lot of money, and you may have depleted your savings. Even if you still have plenty of money in the bank, the Canadian housing market may be different from what you’re used to back home. The home style you want could be more than you were hoping to spend.
The good news is that there are homes available at many different price points! If you don’t have enough money to buy the home of your dreams right now, you could save up for a year or two, or you can buy something more affordable so that you start building up that equity. The Sterling Evolve line is a great example of a more affordable home.
Overcoming Language Barriers
Many newcomers to Canada face some language barriers, and this makes the process more complicated. After all, you’ll be reading legal documents that you might not fully understand.
One way to deal with the language barrier is to ask local friends for recommendations of a home builder or a real estate agent that is fluent in your language. Another possibility is to seek out companies that are familiar with working with new immigrants because they will be aware of your struggles and offer you the guidance you need.
Getting a Mortgage as a Newcomer to Canada
Newcomers can sometimes struggle to get a mortgage. Lenders look at credit history, and if you haven’t been in Canada long, you don’t have much of a credit history built. They’re also looking for consistent employment for several years through the same employer – a challenge if you just moved for a new job.
If you have enough for a 20 percent down payment, this will not be as big of a factor. However, if you don’t, you’ll have to play the waiting game and build up your credit first. With that said, some banks don’t require a Canadian credit history to qualify for a mortgage so if you do have the means to buy a home don’t be discouraged!
Higher Interest Rates
Just like native-born Canadians who have limited credit, newcomers may find themselves paying higher interest rates once they find a bank willing to lend to them. This is because you represent a risky investment when you don’t have a high credit score.
Higher interest rates mean a higher monthly payment and more money paid in interest overall during the lifetime of the loan. You may be able to mitigate this by making a larger down payment which will avoid the need for mortgage insurance, or you may borrow now with a plan to refinance in a few years when your credit score increases.
It’s an exciting time as you get settled in Canada, and when you buy a home, you’ll feel like you’ve truly put down your roots. The best course of action is to work with people who are familiar with the struggles you face. Give Sterling Homes a call or stop by any of our show homes. Our Area Managers can help you get started.