While banks increasingly position themselves as the only real solution for new immigrants seeking mortgages, brokers still believe monolines offer the most competitive options for new Canadians.
“Banks have shut the door on certain clients who have then come to my door,” John Panagakos of Verico Safebridge Financial Group told MortgageBrokerNews.ca. “I’ve been able to secure a mortgage for these clients; when you have access to 45+ lenders the likelihood of me securing a mortgage is better than a client going to a bank.”
That vast pool of lenders gives brokers a leg up on their big bank counterparts, though shopping around is often required.
“I’ve had a client that had only been here for less than two years,” Panagakos said, “and none of the banks would touch it (and) DUCA gave some competitive rates and my client was really pleased.”
Often, the qualifications required by banks for landed immigrants can be unrealistic for these would-be homeowners to meet. That continues to be the case despite the more aggressive stance of banks looking to shore up mortgage originations in slower market.
“Banks assume there is too much risk with these clients,” Panagakos said. "They don’t always have the credit history; some banks want 35-50% down for these clients.”
The key, according to some brokers, is building relationships with lenders that are more inclined to take risks on these clients.
“We have a relationship with B lenders; they understand the situation of a new resident and traditional banks will just reject their application,” Kuljit Singh of Mortgage Alliance AKAL Mortgages Inc. “It’s important to have these kinds of relationships to secure mortgages for new Canadians, though not every monoline is willing to make the exception for new residents.”