I’m interested in buying a condo in Orlando for both personal use and short term rental, possibly long term. Need some direction where to start, please and thank you!
Cross border mortgage looks challenging, and other way?
Specialist · Orlando, FL · Member since 2015 · 183 posts · 83 votes
4y
@Account Closed I was in your situation about 5-6 years ago. At the time, after much research I kept getting back to Windsor Hills. I had stayed there once, liked the community, loved the location, and although slightly older had a great track record for staying occupied and they took care of the property really well. But that was then... not sure about now but as others mentioned above, you'll have LOTS of options depending on several factors. We didn't end up buying and instead moved down to Florida (haha).
On the mortgage side, have you spoken to RBC or TD yet? Both have a US presence (RBC virtually only and TD brick & mortar locations) and both offer mortgages to Canadians based on their Canadian credit history (RBC at least as I just looked into this recently). I think you'll find those to be your best options (I did) but there are brokers down here who offer mortgages to foreign nationals, so they may be worth a looking into also. Good luck!
Realtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 892 votes
4y
@Account Closed What attracts you to Orlando. Do you like going to the theme parks or the shopping/dining that is here due to all the tourism, or just a clean, friendly city? If you think you want to do short-term, you'll be best off being near the theme parks, If long term, you could be anywhere, but with long term, you won't be able to use it....
If you plan to use it yourself and like to play golf or enjoy resort amenities, than Reunion or Championsgate may be a good fit. If your a Parrothead, than maybe Margaritaville.
We have plenty of lenders here that can do Foreign National loans as we have a ton of International buyers here. Harding-Bell is a great place to start. Good Luck!
Property Manager · Orlando, FL · Member since 2020 · 137 posts · 85 votes
4y
@Shawn McCormick has you started well. If you are looking for a condo that is a drastic difference in search criteria versus someone looking at a SFH. There's plusses and minuses to both. To the condo convo: If you are a Disney person on a budget you could look for something like Bahama Bay.
If you are a Universal and Sea World pass holder and you are thinking you want to skirt traffic and spend time in downtown Orlando also (and have more budget) you might be thinking of Vista Cay (one of the few spots in Orange County zoned STR).
@Account Closed It's a more nuanced conversation then "where do I start"? Because the options are almost endless. And can be overwhelming. I have many good friends in the GTA. Hope you and enjoying the winter wonderland! I hear it's been white!! 🤪
Specialist · Orlando, FL · Member since 2015 · 183 posts · 83 votes
4y
@Account Closed I was in your situation about 5-6 years ago. At the time, after much research I kept getting back to Windsor Hills. I had stayed there once, liked the community, loved the location, and although slightly older had a great track record for staying occupied and they took care of the property really well. But that was then... not sure about now but as others mentioned above, you'll have LOTS of options depending on several factors. We didn't end up buying and instead moved down to Florida (haha).
On the mortgage side, have you spoken to RBC or TD yet? Both have a US presence (RBC virtually only and TD brick & mortar locations) and both offer mortgages to Canadians based on their Canadian credit history (RBC at least as I just looked into this recently). I think you'll find those to be your best options (I did) but there are brokers down here who offer mortgages to foreign nationals, so they may be worth a looking into also. Good luck!
It's good to have the Canadian banks. National Bank and Desjardins Bank also give loans. I think all Canadian banks do. The interest rate is higher but it might be the same with US loans for foreigners.
However, aside from higher interest rates, the problem with the Canadian bank loans is that they're for maximum 5 years vs 30 years for US loans. So basically they charge more for a 5-year loan than for a 30-year loan (!!!), taking advantage of the situation. So, personally, I'd try to find a better loan in the US. It might be easier if you go for a commercial loan, for which your non-existant US credit history might be less of an issue.
Specialist · Orlando, FL · Member since 2015 · 183 posts · 83 votes
4y
@Mike Lambert @Account Closed I should clarify, my apologies for the confusion...
When I suggested contacting RBC and TD, I meant their US locations. This is different from their Canadian counterparts and I view them almost as separate banks which they kind of are as they're located in the US and abide by the US rules for banking and mortgages (again, RBC has no physical locations but I think they're headquartered in Georgia, and TD has several locations across the US). I know RBC at least (not sure about TD still) will offer a mortgage that is a true US mortgage (ie. not a Canadian mortgage for US property), so the terms are different but the rates can still be very competitive. For example, RBC offers adjustable rate mortgages (ARM) which is a US type of mortgage (not sure if it's offered in Canada). Main difference here though is that after the 5, 7 or 10 year term is up, you don't refinance like you would in Canada, it would flip to a variable rate for the balance of the 30 years... at least that's how it was a few years back and I don't believe it's changed. The main point I'm trying to make is, I would contact RBC US and TD US and see what they can offer because for RBC at least, they'll offer an actual US mortgage to Canadians and use your Canadian credit. This is different than going to your local RBC in Canada and asking for a mortgage for a US property. Hope I'm making sense in all of my rambling (lol)
No Canadian bank will give a mortgage loan on a US property. I was talking about the same thing, going to the US subsidiary of the Canadian banks.
The loan will be amortized over 20 - 30 years but the problem is that, like in Giuseppe’s CIBC example, the rate is fixed for max 10 years and today it’s max 5 years as far as I know. The interest rate could be much higher when you the rate has to be reset so a real US 30-year fixed rate loan is much better, as I was suggesting.
Investor · Ontario · Member since 2015 · 486 posts · 250 votes
4y
@Account Closed stated, using commercial lenders based in the US is another option for you to consider. At the moment however many of these options have a limited LTV of 60%-65%. One is at 70% currently. Some also require previous US mortgage experience. If you do intend to use this personally for more than a few weeks out of the year, commercial is likely not your best bet.
Specialist · Orlando, FL · Member since 2015 · 183 posts · 83 votes
4y
That's the one thing I really like about the US mortgages, is the 30 year fixed option, especially on investment properties. I wish RBC had that option. TD might but I think only up to 60% LTV as mentioned above. I just checked for fun a few days ago about what RBC had to offer and there does seem to be a 10-year fixed term (variable after as mentioned) on a 30-year amortization. So then it becomes a business decision based on where you think interest rates, house prices, rents, etc. will end up. Or perhaps you'll be able to refinance into something else 10 years from now!
RBC also had 2 options when I was in the market 4-5 years ago... for a 2nd home, they'd do 80% LTV, and if it was for investment purposes, only 60%. HOWEVER, at the time, I believe they said as long as you use it a certain amount of time for personal use, you can rent it on a short-term basis for the balance of the year, if you wanted to utilize the 2nd home / 80% LTV option. Not sure what the options and terms are now.