The job market and economy isn’t what it used to be. Mike had worked for many years in Canada’s well-paying resource sector but like many others lost his job as international employers abandoned Canada in favour of other parts of the world with less political interference and more investment certainty. With a wife and young children to support, Mike did what he had to do and searched for work overseas. Finally, he got an offer and took up employment with a large Dutch multi-national engineering firm operating in Saudi Arabia, and paying in Euros.
On his first month off, Mike flew back to Canada to spend time with his wife and family and take steps to re-stabilize their lives. One important objective was to re-enter the housing market. When Mike lost his job, he and his wife, Cathy, had made the difficult decision to sell their home and move into his parents’ basement until he was re-employed. Upon that sale, they had banked the equity which they used for living expenses while saving the rest for a future down payment, so that was all good. Now that he was back working, was there any hope to get a mortgage and a place to call home any time soon?
Mike's question was simply:
Background
Under Canada’s standard mortgage qualifying rules, lenders require that foreign income show up on the borrower's T1-General tax return for 1-2 years running. Otherwise, a typical down payment using foreign-earned income would be 35% or more.
Further, lenders generally require an employee to be non-probationary (3+ months under their belt) with their current employer and guaranteed hours.
In Mike's case, he was only 1 shift and 1 pay cheque into his new job and to further complicate things, he was being paid in Euro into a Netherlands' bank account.
Solution
Good news for Mike (and borrowers like him) is that there are some “alternative” lenders in Canada that are more flexible with the rule books and able to mortgage-qualify Mike under certain conditions.
Here’s what they came up with:
All this sounded good to Mike & Cathy and they started their property search. Soon they'd have a home-to-call-their-own again!
If this solution might apply to you or someone you know, please reach out or share! Happy to help.