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(June 14, 2024)

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With many people making the move to Alberta in the past couple of years, and what looks like the foreseeable future, transitioning to a new province comes with its own set of challenges, especially when it involves securing a mortgage. While qualifying for a mortgage amidst such a move may seem daunting, it’s entirely manageable with the right approach and foresight. In the following paragraphs, I’ll delve into specific procedures that address the most common applications when qualifying for a mortgage while moving to Alberta.

APPLICATION PROFILE 1: I’m moving to Alberta and will be maintaining my current job

If you are in this category, you are in good shape. The transition should be pretty smooth.

Regardless of how you are maintaining your current job (whether you’re transferring to the Alberta-based office of your employer or being granted the privilege of working remotely from your new Alberta-based home), a more detailed employment letter will be required—one that states the specific terms of maintaining your current employment upon relocating. In addition to the disclosure, the employment letter should include all of the standard information that employers typically disclose: date of hire, current role, income details, full-time or part-time status, and contact information of the letter writer.

Once your employment is confirmed, the focus shifts to your down payment. How much do you have for a down payment, and is it tied to the sale of your existing home? If so, make sure the logistics of your sale proceeds are understood and accounted for. For example, will the sale of your existing home line up with the possession date of your new home in Alberta? Don’t worry if the dates don’t line up because there is a built-in feature within most mortgage providers that addresses this (bridge financing), but the key to making it work is that the sale of your existing property must be firm (accepted offer, not subject to conditions).

As you are moving into the property and will be occupying it as your principal residence, the minimum down payment is only 5% (up to a purchase price of $500,000, then 10% on the balance thereafter up to a purchase price of $1M, at which time the minimum down payment increases to 20%).

APPLICATION PROFILE 2: I’m moving to Alberta and will commence employment with a new job and employer

You are now entering the approved-on-exception-basis category of mortgage qualification. Lenders will likely approve your new employment without much resistance. However, depending on the terms and conditions of your new job, the lender may raise the qualification bar and seek additional compliance requests. For example, if they grant you an exception on the probationary period requirements of your new employer, they may counter back and request that you provide a 2-year history of tax returns where they will expect to see a steady and consistent flow of income (a request they may not have made otherwise if your employment did not include a probationary period).

APPLICATION PROFILE 3: I’m moving to Alberta and will look for a job upon my arrival

This is definitely the most challenging qualification pathway, as lenders’ guidelines will not allow for qualification if employment isn’t in place at the time your purchase completes. Here are some alternative ways to purchase a property or qualify for a mortgage if your employment prospects are not yet confirmed in Alberta:

Consider purchasing a property ahead of your intended arrival while you are still employed with your current employer. This is not as easy as it sounds. Your intent would change from purchasing a property as a principal residence to purchasing as an investment property. This would require a minimum down payment of 20%.
Another alternative is if one of your family members can begin the transition with the move while you stay and remain employed in your current place of residence. An application of this can be one of your family members committing to new employment or post-secondary schooling in Alberta. This scenario would allow you to qualify via the Second Home mortgage, enabling you to purchase with as little as 5% down payment. The outcome would be that you would now have a property in Alberta while still maintaining your existing employment and living situation in your current province. This would technically allow you the option to move into your newly acquired second home at one point in the future when your employment prospects in Alberta are solidified and certain. However, keep in mind, the qualification for this type of scenario demands a solid qualifying income, as the qualification would be based on your ability to service both mortgages—the one you just acquired in Alberta, and the one you currently hold (if applicable).
And lastly, if you have not yet solidified employment upon arrival to Alberta, consider purchasing a new construction home. Depending on the timeframe of the builder to build the house (4 to 12 months), this gives you a buffer of time that allows you to settle into your new surroundings and eventually secure the employment required to qualify for the mortgage upon completion of the property. As long as you have the deposit required by the builder to secure the purchase contract of the property, your mortgage qualification can delay and extend into the future as the mortgage qualification becomes firm upon completion of the property. The timeframe to build the property is key as it becomes the time-based reference point to secure your employment and sort out any other conditions that may be part of the mortgage qualification (i.e., selling your house in your originating province). So upon moving to Alberta, you would seek shelter as a tenant for the medium term (as long as it takes for the property to be built), then move into your newly constructed home once it’s complete.

OTHER factors to be aware of

If your down payment is coming from the proceeds of the sale of your existing home, be aware of your options regarding the intricate timing of the exchange of these proceeds. For instance, let’s say your sale in Ontario is scheduled for July 1, but your closing date for a newly purchased property in Calgary is on June 15 and in order to complete you need the proceeds of the July 1 sale (in Ontario)…what now? In instances like these, bridge financing is utilized. Click here to be redirected to a past post on Bridge Financing.
All of the scenarios in this post require an in-depth mortgage pre-qualification as there are many qualification variables that are intertwined with the transition of moving from one province to another. It is critical to complete a detailed mortgage pre-qualification with a mortgage broker that is experienced in this type of transaction (click here to schedule a free consultation call with Marko Gelo to discuss your unique circumstances).
All of the above qualification scenarios are conventional/standard lending applications (AAA lending). Other less stringent mortgage qualification programs are available in Canada. In exchange for the less demanding qualification criteria, the mortgage rates are often 1-1.5% higher and a fee of 1-2% is deducted from the mortgage proceeds upon closing.
Alberta has no property transfer taxes!
Alberta has no Foreign Buyer Taxes!

Moving to Alberta? Call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko. You can also call Marko on WhatsApp.

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