Best Time for Canadians to Purchase Real Estate in the US

Thanks to the weak US dollar, real estate in America has suddenly become less expensive for Canadians. As of the writing of this article 1 USD = 0.97 Canadian dollars. Less than six months ago one American dollar would have bought $1.15 Canadian. It may not sound like a lot of money but in terms of real estate it translates into thousands of dollars.

For example a $200,000 USD American home would have cost $230,000 Canadian six months ago. Now, this same priced home is $194,000 Canadian. If you factor in the fall in home prices during this same time, that very same home is now a lot cheaper for a Canadian citizen. So, deals abound.

How about obtaining home financing you ask? Well, for Canadians, the loan process is very similar to that for Americans. First of all the borrower will need to complete a mortgage application. The borrower will be required to furnish a letter of employment, relevant bank statements and a copy of a valid Canadian passport with an acceptable entry visa stamp. Once all the information has been verified the lender can then determine the most suitable program.

In my experience I have found that there are two distinct loan options available. The first option works if the borrower has perfect Canadian credit. In this case the lender can go through a large credit depository like Chase and pull Canadian credit into their system. The lender can then use this in making a credit decision. There is no tolerance for bad credit in this option. Even one late payment on a small credit card account twelve months ago can kick the application out.

Armed with solid Canadian credit the borrower now has access to a wider choice of mortgage loan programs. They can qualify for fixed rate programs with limited pre-payment penalties and other features common to conventional loans.

In the second loan option the lender does not pull Canadian credit and only verifies employment, the liquid assets and the visa status of the applicant. In this case the loan programs are rather limited. These programs usually involve high down payment, variable interest rates, balloon payments and pre-payment penalties. Not all of these features may apply to the loan but will most certainly include a combination depending on the lender.

The two program options I describe above are only available for the purchase of a second home. Purchasing a primary residence is still available but will require a long-term US visa such as an H-1B. It also requires proof of continued employment in the US for up to three years. The process is then exactly the same as that for Americans.

There has never been a better time for Canadians seeking to purchase a little bit of the US. As any serious Real Estate agent will tell you the Phoenix and Tucson areas are one the best markets in the country. Plus for Canadians its a welcome change in weather, not that this is earth shattering news! There are already a lot of Canadians here in Phoenix – I mean how else can you support a professional ice hockey team in the desert?

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.