Canada
When looking to move away overseas the subject of finance is never far away with the need to investigate and understand the country you’re moving to. While you may be able to arrange an expat mortgage in the UK, or whichever country you’re moving from, it is vital that you are able to obtain finance, when required, in your new home country.
There is a post on the Canadian expat forum entitled “How long before you can get credit cards & a mortgage” which, while still fairly new, offers an interesting snapshot of life in Canada and the financial system.
While there are many different financial arrangements to consider the main ones are bank accounts, mortgages and credit cards which we will cover below:-
Bank accounts
Even though we have seen vast improvements in the worldwide banking system, whereby you will likely have access to your “home” bank account in any country around the world, you need to consider whether you need a local bank account. It is rather strange that many people would rather retain their original bank accounts rather than open a new local account in a new home country.
However, aside from this matter it is vital that you make contact with your local bank as soon as you land in your newfound homeland. While you will initially need documentation to confirm your identity, where you came from and that you are legally allowed to stay in the country, this is something that everybody needs to go through. Getting your local bank manager onside could prove beneficial into the future as at the end of the day the bank is looking to make money out of you and should be as helpful as possible.
Mortgages
Mortgages are slightly different in that there is significant currency risk whichever way you choose to go, whether buying a property in your former homeland currency of converting into the local currency. However, if you are looking to move to Canada and gain employment, there seems little sense in converting your Canadian income into your former homeland currency. Alternatively, if you’re being paid in your former homeland currency there would seem little point in taking out a Canadian mortgage and converting your income – you need to arrange your finances around your own circumstances.
Interestingly it would appear that a number of Canadian banks will accept Equifax credit rating reports from your original homeland. This can then act as a basis for your future financial relationship with your bank in Canada as well as allowing you to acquire finance to buy a property.
One final point to consider regarding mortgages in Canada (and anywhere around the world) is the fact that you need to have proof of income, or assets, before any bank would even contemplate taking you on. Even though the fine details of some mortgage markets around the world may differ slightly there is still a need to be able to confirm and clarify your income and if you are a new entrant to a country there is every chance you may be asked for a higher than normal deposit. These are traditional security measures taken on by the mortgage industry around the world and in light of the ongoing economic downturn we have seen deposit amounts increase markedly.
Credit cards
Credit cards are very much an evil which many people feel they cannot do without in the modern world. However, when moving to a new country you may find credit card finance a little more difficult to obtain than in your former homeland although places such as Canada have specialist services for new immigrants, which will allow them to obtain finance on a similar basis to Canadian nationals.
It is worth noting that you may well need to put up a small deposit to guarantee your credit card finance and cover the costs involved in obtaining the card. As normal, it is also vital that you do not over extend your credit card finance because this will impact negatively on your new credit rating.
Credit overseas
Many countries around the world now require that you either have significant assets to look after yourself, or sufficient regular income, before they will even consider allowing you to move there. The requirement that new entrants to a country are able to finance their own cost of living has become ever more vital, although in Europe the option for members of the EU population to move between EU countries has caused some concern and problems.
When looking to move overseas not only should you have obvious elements such as employment, accommodation and assistance in place on your arrival in place but you should also have significant financial backing behind you. If you start a new job there is every chance you will not be paid for a few weeks and without finances behind you how would you survive?
The impact of the worldwide recession
While the worldwide recession will in the context of time blow over there are concerns that many financial markets around the world will be changed forever. Whether we will see a return to the relatively high risk strategy of many banking operations around the world remains to be seen, but in the short term banks will require more and more security making life more and more difficult for those looking to obtain credit in a foreign land.
Currency risks, employment risks and the risk of acquiring property in a foreign land should all be taken into consideration before you even consider moving overseas. While life in places such as Canada may seem a whole lot better than your home country, it is vital that you have your eyes open when looking at the specifics.
Conclusion
It would appear that obtaining credit in Canada looks fairly straightforward on the surface with a suggestion that an Equifax credit report should suffice regarding your mortgage application. However, as with any other country around the world there is a need to rebuild your credit rating in a foreign land from the very bottom, ensuring you do not prompt any negative posts to your credit rating which could impact in the short, medium and longer term.
If you have access to a regular income then there is every chance that you will be able to obtain a certain degree of credit as soon as you land. However, not all financial markets are the same, not all paperwork is identical and you may need to adapt and investigate the market to get the most out of it. Making friends with your local bank manager is probably a good start!
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