What are the expectations

2 Replies

To buy real estate in other countries, are the expectations the same (credit, money down). Being as though I don't have much money and working to repair my credit, are opportunities greater elsewhere (canada, europe)?

@Stephanie Dobbs

The process of purchasing real estate in Canada is similar to that in the U.S.A.  Residential real estate is not as affordable as in the U.S.A. and lending (residential mortgages) is different.

Transactions here are Closed using attorneys - as they are in some U.S.A. states.

The biggest difference in financing is that we do not have long term mortgages in Canada.  Mortgage terms range from 6-months to 7-10 years (7 & 10 year mortgages are fairly recent and not frequently used as they come at a premium) with the most common term being 5-years.   

Qualifying for a mortgage is a little tougher in Canada, however the rate for mortgages in arrears is well below 1% (default is less half of that).   When placing a residential mortgage, you must qualify at a 25yr. amortization with the 5-year fixed-rate mortgage term regardless the terms of your actual mortgage (i.e. If you planned to use a 3-year term, variable rate mortgage with a 30yr. amortization, you still have to qualify based on the 5-year fixed with 25yr. amortization).

Standard downpayment is 20% - there are high ratio, insured mortgages available to Canadian citizens for owner occupied properties which have a 10% or 5% down payment.

Mortgage interest on an investment property is a deductible business expense as it is in the U.S.A.  Mortgage interest on your primary residence is not deductible, the trade-off is there is no capital gains due on the sale of your primary residence.

There are many more subtle differences, but this gives you a starting picture.

Wow thanks for the information! Greatly appreciated.


Stephanie Dobbs

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