Alternate Credit Checklist

In Credit, Mortgage Tips by Nate

If you don’t have well-established credit, either due to not wanting it because you prefer to not risk taking on debt, or because you’re new to Canada and haven’t had a chance to establish credit through credit cards or loans, there are still financing options available to you. There are many ways that we can prove to a lender that you are a credit-worthy applicant and help you to qualify for the lowest interest rates as well. I have listed some of the options below to help you:

  • A letter of reference from your bank in your home country (or in Canada)
  • An International Credit Report from Equifax or TransUnion
  • A letter of reference from your landlord in Canada (12 months’ rental history will be required, can be from more than one rental)
  • A letter of reference from your utilities provider, child care provider, or car insurance company stating that you have paid them on time in full for the past 12 months
  • 12 months’ transaction history for your primary bank account (can be partially from your country of origin if you’ve been in Canada less than 1 year and your home country has a similar banking system to Canada’s)
  • 12 months’ statements from one of: utilities, phone, car insurance, etc…
  • 12 months’ history of regular savings, such as putting money into an RRSP or TFSA account each month

What are financial institutions looking for when they ask for these documents? They’re looking to see if you have the character to fulfill your monthly financial obligations and manage money wisely. They want to ensure that you will pay them on time for the large amount of money they are willing to lend to you.

The 12 months’ history requirement has been amended. If you have 5% downpayment and are a fit for Alt-Credit, then 12 months’ history will be requirement. If you have 10% downpayment, then only 6 months’ Alt-Credit is required.
All reference letters must be on company letterhead with the name and contact information for the person who wrote the letter. Your financial institution may contact them to confirm the information provided.
Every person’s situation is unique and may require some adjustments to the paperwork. Whatever your situation may be, it is worth knowing your options and finding out what you can do to get your own home.
I’m always here to help….