US Mortgage Guidelines for Canadians
How to Qualify
To qualify, you will complete a standard mortgage application and provide documentation about your income, credit, liabilities, and assets. Your Canadian credit history and income are used to qualify. Once your application and all of the required documentation are submitted, a pre-approval can be completed in a few days. Once you have an accepted purchase offer, the mortgage processing typically takes a minimum 30 days so quick possessions are not possible unless you purchase with cash.
Down Payment Requirements
Your down payment amount depends on various criteria, including credit score, type of property, and the state of where the property is located. In the U.S., with healthy credit, you can expect a minimum down payment of 20%-25% for a primary residence or second home and 20-50% for an investment property. The down payment can come from your personal Canadian savings, or by accessing the equity from a Canadian property with a home equity line of credit or mortgage equity take-out.
We provide mortgage financing for residential properties being used as your principle residence if you are living in or moving to the U.S., second home or seasonal properties for those escaping some or all of the Canadian winter, rental properties used exclusively for investment purposes and nearly all types of commercial properties. We can provide financing ranging from $50,000 to over $100 million for houses, condos and commercial properties.
Products and Terms
Mortgage products in the US differ from Canada in a number of ways. US mortgages offer longer fixed terms of up to 30 years with very low rates and adjustable rate mortgage products with shorter terms that will move with the market. Most mortgage products are fully open so you can pay them off at any time without penalty. We offer fixed rate mortgage products, adjustable rate products and home equity lines of credit.
US Mortgage Interest Rates
Interest is accrued monthly in the US, while in Canada interest is accrued semi-annually. US mortgage products can be fixed for longer terms with very low rates such as 15 or 30 years. ARM or adjustable rate mortgages are available with shorter terms including 3-year, 5-year, and 7-year with amortization periods up to 30 years. These rates are locked in for the first term and will then adjust yearly up or down based on the market.
Closing Costs and Expenses
The costs associated with a mortgage in the US can be higher than in Canada. There are application and mortgage origination fees charged by US banks and lenders. These can range between 1% to 3% depending on the type of transaction. Most mortgages do not have prepayment fees for early payoff so the costs are included upfront. Other expenses you can expect include appraisal, inspection, and title closing costs.