international mortgages

canada

Essential information for buying properties in Canada

Buying property abroad is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.

It is of paramount importance to seek independent advice from an overseas solicitor.

You need to ensure that you will have full title to the property on completion and that you have the appropriate documents available for the lender.

Take appropriate independent legal advice before signing the sales contract or paying a deposit. The bank will require a copy of this document with the relevantapplication form. However, you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is legally binding.

You should check with the estate agent and/or your lawyer that you are aware of the costs charged by legal and Government authorities for buying a Canadian property. The lender will also have their own legal costs for assigning the loan, the cost of which they will normally advise you when they issue the mortgage offer. These associated fees/taxes are typically between 10% - 15% of the properties purchase price.

Be aware that the solicitor and/or notary may be incorporating costs for assigning the mortgage within his charges, you should establish the actual cost before proceeding with a loan application.

All mortgages should have a suitable life assurance policy assigned to them. It is not mandatory but strongly advisable.
Properties can be purchased either individually or in joint names.

Eligibility

We typically arrange loans in CAD Dollars or Sterling; however other currencies are available if your salary is paid in that currency
Repayment and Interest only loans are available
The maximum loan to value for a purchase is 65/70%
The maximum term is 30 years
The minimum loan amount is £100,000 or CAD$ equivalent with no maximum
All schemes require full documentary evidence of income – ‘self-cert’ mortgages are not available.

Affordability

To qualify for a mortgage in Canada, a calculation is used to establish whether you can afford to maintain the mortgage repayments. This will automatically happen when you complete our enquiry form and we will not charge you for this service.

Your existing liabilities, including your UK mortgage or rental payments, loans, credit card payments and maintenance are taken into account, together with the proposed Canadian mortgage payments. All this must not typically exceed 40% of your monthly net income. For example if your net joint income is £2,500, 40% of this equates to £1000. If your only liability is your current UK mortgage payment of say £500 per month, this would leave a balance of £500 for your Canadian mortgage repayment.

The amount that you can borrow is also restricted by the maximum loan to value as mentioned under Eligibility and criteria.

Proof of income requirements

If you are employed:

Your last three month’s payslips
Your latest P60 and employers reference
Your last three month’s personal bank statements

If you are self-employed:

Your last two year’s audited accounts, tax returns and accountants reference
Your last 3 month’s personal bank statements

Other documents will be required and will be confirmed when application forms are sent to you.

If you would like to speak with a representative to discuss your requirements please call +(34) 677 874 948

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