How Canadian Citizens Can Get a Mortgage in the US

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Every year there are tens of thousands of Canadians that purchase property in the US.


The relations between the United States and Canada are usually very warm and close despite some differences between the countries. Many Canadians tend to visit and sometimes work in their southern neighbor and vice versa. As such, some Canadian citizens may wish to purchase property in the United States for various reasons, including an investment property. 


The US may be a very attractive investment location for Canadians looking to invest outside of their home country. There is a somewhat similar culture, it’s geographically close and the US shares a common language for the most part. 


Regardless of whether the property is a rental for investment purposes or vacation property, mortgages & financing can be challenging at times. This is especially true for non-us based real estate investors. 


Challenges for Canadians Citizens

While many Canadians may think that a US green card or visa is required to purchase property, that is not the case. Even without a visa, Canadian citizens can purchase properties in the United States. All that is required is an Individual Taxpayer Identification Number which an investor can receive from the IRS. 


The biggest challenge for many is securing financing for a property. Despite the US and Canada being close geographically and culturally, most US lenders will not approve a mortgage for individuals without a banking history in the US. A Canadian lender, on the other hand, may not approve a mortgage loan for a property outside of Canada.   Additionally, most US government backed loans wouldn’t be accessible for Canadian citizens interested in residential properties in the US.  For years it was a hassle for Canadians even with a good Canadian credit history to get a mortgage to buy property in the US.


Getting an Edge in Securing a U.S. Mortgage

Regardless of the terms, whether it is a fixed-rate or an adjustable rate mortgage Canadian citizens may face some difficulties. This is due to many U.S mortgage providers not recognizing Canadian credit history. To get an edge and get a mortgage approved in the United States, here are a few tips and tricks:

Canadian Credit History

Generally speaking, owning another property is always positive when applying for a home loan. If you own a Canadian property, make sure to list it when applying even if it isn’t your primary residence.  Providing a credit history is also a must and a good Canadian credit rating can make a big difference.

Documentation of a stable source of income, such as bank statements and/or tax returns is also required. Other supporting documents may also be required.  Personal data may also play a part in mortgage rates and approval.

Down Payment

The down payment amount can also be a factor. Mortgage brokers and lenders may be more likely to approve a mortgage loan to investors who put down a larger down payment in relation to the property’s purchase price.


Differences Between U.S. & Canadian Mortgages

There are several differences between Canadian and U.S. mortgages beyond mortgage rates. Canadian banks and lenders tend to operate slightly differently. When dealing with adjustable rate mortgages, for example, the mortgage interest may be adjusted monthly while in Canada is generally updated semi-annually. Many Canadian banks tend to charge lower interest rates on average although penalties tend to be much higher. Mortgage terms also tend to be a bit shorter in Canada with the maximum period being 25 years.

This refers to Canadian lenders when financing a Canadian property in comparison to U.S lenders on American property. Cross border mortgages for residential property tend to be a bit different as buyers tend to be foreign nationals or non permanent residents.


The Process of US Mortgages for Canadian Citizens

While there are some differences in banking between the United States and Canada, the process to receive financing is similar. Pre approval generally is generally quick and investors can receive a pre qualification letter in 1 business day.

Afterward, the investor will need to provide all of the personal required documentation. This includes IDs, tax returns, and information regarding income, assets, and debt.

Later as part of the mortgage process, information regarding the property in the u.s is required. This includes its location, type of property, and its price. Later you can discuss the loan amount and down payment amount.

Once everything is approved, the investor will receive the mortgage funds in as quick as 14-30 business days.

Start Owning Real Estate in the USA

Interested in financing or refinancing an investment property in the United States? We can help! 

We at USA-Mortgages provide specialized mortgage programs for international real estate investors interested in purchasing an investment property in the US. Additionally, we offer refinancing options to those who already own a property. 

We offer an easy, streamlined solution for non-US residents interested in financing or refinancing properties at attractive rates. Our consultants will find the best home loan or refinancing option available and assist you in filling out your application. Both adjustable rate mortgages and variable rate mortgages are available. Make the first step in owning or refinancing a property in the USA. Contact us for more!

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