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US MORTGAGE FOR CANADIANS

Cross-Border Mortgages Have Never Been Easier

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Why Canadians choose Certified Mortgage Brokers for their US mortgage:

…We Will Do Our Best to Close on Time, Headache Free, with Best Possible Rate.

  • Buy a property anywhere in the United States. We approve loans in all 50 states
  • Your Canadian credit history is your passport to an approved mortgage
  • Flexible terms of 3,5,7 or 10-years with a 30-year amortization
  • Lessen the initial impact of foreign exchange exposure - all you need is the 20% down payment and the costs of closing

  • No penalties for early or lump-sum payments so you can pay as much as you want whenever you want
  • Fixed Rate or Adjustable Rate Mortgage (ARM). Select the mortgage that best meets your needs.
  • Our cross-border mortgage bankers are trained to help Canadians to get a US mortgage quickly and easily
  • Avoid paying Foreign National premiums.

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Questions? We’re here to help!

Can Canadians get a mortgage in the US?

Although many countries place restrictions on the purchase of property by foreign nationals the United States is not one of them. Anybody can buy property in the US, regardless of their residency or citizenship and many Canadian residents are doing just that.

The National Association of REALTORS reports that in the 12-month period from April 2017 to March 2018, Canadians bought 27400 properties, spending more than ten billion US dollars in the process. 60% of the sales were in the sunshine states of Florida, Arizona and California.

Many Canadians are buying US real estate for their own use. Some work in the US and prefer not to rent. Others own businesses in the US and travel there frequently. There are also those who buy property in the US for investment purposes choosing to rent them out for extra income.

A growing number of Canadians are buying holiday homes in the warmer climes to escape the cold weather for part of the year. These so-called snowbirds were once mostly retired folk. Over the years the trend has started to encompass a large number of younger people too.

It is also not uncommon for retirees to look for valuable US properties to supplement their income with rentals earned on the properties they own in the US.

Canadians who earn taxable income in the US can get a mortgage because the eligibility for a US mortgage is not based on residency or citizenship but on income. That being said, it is more difficult to get a US mortgage for Canadians.

For example, non-permanent residents can only get government backed loans under stringent conditions. Many banks won’t lend to foreign nationals and even if they do, they are likely to charge higher interest rates.

To simplify the process, it is best for Canadians seeking a mortgage on US property to approach a Canadian lender who also operates in the US and has expertise in cross border mortgages. The advantages of dealing with such a bank include the following

  • Better interest rates – US financial institutions charge a penalty for the inconvenience of dealing with foreign nationals and the differences can be significant, especially over the term of the mortgage.
  • Quicker approval – Canadian banks can quickly access your credit ratings and can offer you systems and processes with which you are accustomed.

RBC US mortgage for Canadians

The advantages of financing through RBC Bank

There are some very good reasons why you should finance your US property with an RBC cross border mortgage. RBC is Canada’s largest bank and one of the biggest in the world by market capitalisation. They also have a product designed specifically for Canadian’s wanting to finance property in the US.

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No prepayment penalties

This is an important feature of a cross border mortgage as it allows you to make payments when the exchange rate is favourable. Watching currency fluctuations is important as it affects the expenses you pay and the income you receive.

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Finance across the US

Buy your property anywhere in the US and RBC will finance it. The bank finances property in all fifty states across the country.

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Your Canadian credit history counts

RBC uses your Canadian credit history and your prior relationship with RBC for mortgage approval so you get the best terms possible on your mortgage.

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Choose the term of your mortgage

Choose the term of your mortgage for 3, 5, 7, or 10 years with a 30-year amortization period. This ensures that your repayments are as low as they can get, and if you want to pay your mortgage off sooner you can do so without incurring penalties.

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Reduce foreign exchange losses

Pay 20% down payment and closing costs rather than making a 100% lump sum payment. You can make lump sum payments when the Canadian dollar strengthens.

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Foreign national premiums not required

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Customised packages for expats, snowbirds and frequent travellers

You get to deal with agents that know Canadians and how to deal with them.

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Get Up to $2,500 Cash Back When You Close With Us!

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What are your options when getting US mortgages as a Canadian?

Canadians wanting to buy US real estate have three options

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Cash

Up until recently 80% of property sales to Canadians were cash deals, but as the Canadian dollar has weakened against the US dollar, this is changing.

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Home Equity Line of Credit

Whereby you borrow funds backed by the equity on property you already own. This is a good choice since the interest and repayments on HELOCs is often lower and you withdraw money as you need it. It’s flexible, relatively inexpensive and you can keep borrowing up to the negotiated limit as you make repayments.

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A US mortgage

With the property serving as collateral. Canadian banks won’t offer mortgage on a US property because they have no jurisdiction in the US so they can’t foreclose on the property in the case of non-payment. This means that you will either have to apply to a US bank or use a large mortgage provider such as RBC for your cross-border mortgage.

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US property with cash

There was a time when it made sense to pay for your US property with cash but with the exchange rate at around $0.75 to the US dollar, your best bet is to buy the property using a U0S mortgage for Canadians.

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Fund a TD Mortgage and You Can Get up to $2500 with a Purchase!

Get prequalified

It is always a good idea to start your house hunting with a pre-qualification letter. It is easy enough to do through online application or by phone. Pre-qualification ensures that you set about house hunting knowing exactly how much you can spend. Many US realtors won’t even start the house-hunt without the prequalification.

A prequalification may also give you the edge when it comes to negotiating the price. It may not be as alluring as cash but the seller will know that you have a good chance of getting the funds you require.

Pre-approval is good for 120 days.

You have questions. We are here to help!

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How are US mortgages different from Canadian mortgages?

Mortgages in the US are similar to those that you can get in Canada and it is easier to get one than you may have imagined.

You’ll be surprised at how long it takes though. In Canada you can usually get your mortgage within five to seven days.

Due to state and federal requirements, a mortgage in the US takes a bit longer to process, typically between 30 and 45 days.

Application requirements are the same. The documentation requirements for a US mortgage are as follows:

  • Income – tax returns for two years
  • A list of your assets and liabilities
  • Property portfolio – if you own other properties the bank will want to see the deeds of sale.
  • Proposed property purchase
  • Two years proof of employment – pay slips, or pension statements
  • Country of residence – proof of residence by way of your social security card
  • Evidence of home owner’s insurance

Terms and conditions for a mortgage for Canadians in the US

Interest rates
Down payment
Mortgage term
The closing costs
Home owner’s insurance

How much can you borrow for a cross border mortgage?

How much you can borrow on a cross border mortgage depends on the size of the down payment and the monthly repayments that you can afford. It also depends on how you plan to use the property. If you plan to live in it for part or all of the year, you can borrow up to 80% of the value of the property.
Down payment rules differ for investment properties and some institutions may require a down payment of as much as 40%.

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Questions? We’re here to help!

Using a HELOC to access US equity

A HELOC is a popular and useful way for home owners to access their home equity as and when they need it. It is flexible and easy to access and you only pay interest on the funds that you withdraw so it is relatively inexpensive.

HELOCs in the US operate somewhat differently to the way they do in Canada. The rules may differ slightly from financial institution to another, but the terms are typically as follows

  • You may borrow up to 80% of your home equity
  • Your bank will approve a credit limit and you may borrow as much or as little as you require up to that limit
  • Each time you make a repayment your available credit is topped up
  • There are no penalties for early payments.

The advantages of using a HELOC to access US equity

  • A HELOC is an especially useful instrument for Canadians with property in the US as it can assist with funds without incurring foreign exchange costs.
  • It also means that you can preserve your equity in your Canadian property for your financial needs at home.

There are other benefits in addition to these.

  • The closing costs of HELOCs are usually lower than the mortgage closing costs
  • You can draw only what you need and pay interest only on what you’ve drawn
  • Your mortgage is unaffected, good news if you’ve negotiated a low interest rate.

Google Reviews

Certified Mortgage Brokers
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Afton Jaskolski
2020-12-30

Getting a private mortgage was not easy to be honest, but at least with Mr. Leon it was doable. Thank you for your help!

Davin Mills
2020-12-26

There are a lot of mortgage brokers in toronto to choose from, I was a bit intimidated by that. Don't regret I picked CMB, they took the lead and made sure to cover all the bases

Tracy Wilhoite
2020-11-21

I was renting an apartment for a long time and finally decided to take a big step - get a mortgage instead. Team at certified Mortgage Brokers laid out various options for me. The actual process went smooth and quick, happy with my new home.

Ryder Turcotte
2020-11-16

My wife and I decided to refinance our mortgage and started looking for a mortgage broker in Toronto. There were so many options, so you can imagine how overwhelmed we got! After talking to Leon we decided to proceed with Certified, didn't regret that decision once. They always gave useful recommendations, were attentive, and constantly in touch. And most importantly (for us) they helped us to save some money!!

Lucy Zimmerman
2020-11-11

Vita was great. Helped my son with all the paperwork and got him very good interest rate. On the closing date called to follow up if everything went fine. Quite a pleasant experience. I would recommend this firm for anyone who is looking a mortgage broker.

What to know before refinancing

Your home equity is the difference between the market value of your property less the amount you owe. You home equity grows over time.

Every month part of your repayment goes to interest and part to reducing the initial capital outlay. The amount that comes off the balance is quite low in the early years but it increases over time. In addition, property tends to grow in value along with inflation and any improvements you may make.

For many people, a large portion of their wealth is tied up in home equity and it can offer them an important source of finance when they need it most. When you decide to refinance your property, you can release those equity funds and use them to improve your lifestyle.

The Advantages of accessing home equity

  • Reduce monthly expenses - Done for the right reasons, refinancing can offer immediate financial relief when you negotiate the terms and conditions to suit your current lifestyle.
  • Equity release - refinancing can release cash for home improvements or educational requirements by allowing you to use your home equity as security against a larger mortgage. You could also use the money for the down payment on your US mortgage for Canadians.
  • Debt consolidation – refinancing can help to reduce the interest burden of debt by enabling you to pay off expensive personal loans and credit card debt. The interest on secured finance is considerably lower than unsecured finance so this can save you a lot of money.

Considerations before you decide to refinance your mortgage

How much is your home worth?
What are the closing costs?
Do you have enough equity?
How much interest will you pay?

Consider the costs of owning a home in the US

In addition to the one-off costs of down-payment and the closing and origination costs, you will also incur ongoing costs of property ownership in the US. These include

  • Mortgage repayments – the biggest cost
  • Utilities
  • Security
  • Maintenance – this requires some consideration. How will you manage maintenance over the distance? You may need to hire a maintenance company to ensure that your property stays in top form
  • Taxes – local property as well as Canadian taxes
  • Community fees – may include maintenance, management fees and services
  • Travel costs

It is also important to consider the exit costs, which may include taxes or estate duties.

Taxes and estate planning

More and more Canadians are investing in US properties. These properties run the gambit from second homes to rental homes and investments. When you buy a property in the US it is important that you factor in the US tax laws and exit requirements. As a Canadian, you will have to pay non-residents withholding tax of 30% on any rental earned on your US property.

If the income is earned by a business, you can reduce the income by any expenses that you incurred. Unlike Canada, interest on your mortgage repayments is tax deductible. To file a tax return, you’ll have to register as a US tax payer.

If the owner dies the property may attract estate duties if he or she has more than $60,000 in US assets. The assets will attract estate duties at a rate of 35% on the total value of the US assets. The same applies if the owner has more than $5 000 000 in global assets. All of these issues are relevant which is why you must seek advice from a cross border mortgage specialist before you apply for a mortgage for Canadians in the US.

At CMB our mortgage brokers in Toronto are here to help Canadian citizens to obtain a US mortgage. We will guide you through the process to ensure you get the best possible terms.

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