Hi everyone,
I am considering buying a property in USA remotely, while still living and working in Canada.
Couple of US lenders I talked to seem to be unable to offer me a mortgage because I don’t have American SSN (Social Security Number).
I wonder how other Canadians obtain financing without SSN and American credit score?
Do you only use hard money lenders or buy cash – or is there a way to obtain a regular U.S. mortgage?
There seem to be a mortgage with RBC bank, but their APR is from 6.472% to 7.188% which is very high.
I assume their penalties and pre-payment privilages will be similarly unfavourable – but I still need to set up an appoitment to figure their product out.
Can anyone advice me how did you go about getting your mortgage in USA with the local US lender while living in Canada?
Thank you in advance.
If you are not a U.S. resident, you will be limited to only a few options depending on the asset class.
Canadian banks will only lend to you personally, which is based on your personal DSCR. It's not a scalable option since they only consider a % of the rental income in their underwriting; moreover, exposing you personally to liability issues. Canadian banks will not lend to corporations purchasing U.S. real estate.
Canadian banks are also far less creative; I highly recommend building a relationship with U.S. lenders.
For every house I own in The U.S., I use B Lenders, which are typically 70%-65% LTV, 6.5%+ rates, but they lend to my U.S. C Corps, have no lending limits, and do not require me to have any personal income, residency, credit score, etc., just the down payment.
The best route I've found is closing cash on enough properties that I can group 4+ units, then getting a blanket/portfolio loan across each asset; you get the best terms.
Closing with U.S. financing as a Canadian can be quite the financial gymnastics since you will be required to have your signatures notarized by U.S. notaries; thus, you either have to travel down to The U.S. each time to sign or spend $1,500+ to have the U.S. consulate in Canada authentic the signatures (which cost me a small fortune during COVID), OR, if you have the option of designating a power attorney who is a U.S. resident to sign on your behalf.
This process typically takes 50+ days for a foreign national. It can kill the deal depending on where you are buying, so I always close cash to secure the property, get the best entry price, and worry about financing later.
You've got to pay to play in The U.S., especially after factoring CAD dollar right now... but over the long-term, there is far more opportunity south of the border.
I just recently purchased in the US using all cash. My plan is to get pdelayed financing. I have some insight on this as recently Iv contacted quite a few lenders. RBC has some of the best terms but doesn't offer 30y fixed and will only lend on a certain amount of properties.(I think 3 max) They are also very tough to work with, lots of hoops to jump through. But if you can get approved by them they are a great option. I was denied due to my income being too low. BMO lends to investors but requires 50% down last I checked. TD will lend on the east cost but I dont have much info on them. There are some HML that have competitive terms with RBC and are 30y fixed but at this moment I don't think you'll get under 7% interest. Depending on where your investing, sometimes local lenders will offer foreign nation loans. Other may be able to offer some more info. Goodluck!
Hi everyone,
I am considering buying a property in USA remotely, while still living and working in Canada.
Couple of US lenders I talked to seem to be unable to offer me a mortgage because I don’t have American SSN (Social Security Number).
I wonder how other Canadians obtain financing without SSN and American credit score?
Do you only use hard money lenders or buy cash – or is there a way to obtain a regular U.S. mortgage?
There seem to be a mortgage with RBC bank, but their APR is from 6.472% to 7.188% which is very high.
I assume their penalties and pre-payment privilages will be similarly unfavourable – but I still need to set up an appoitment to figure their product out.
Can anyone advice me how did you go about getting your mortgage in USA with the local US lender while living in Canada?
Thank you in advance.
What type of property is it?
Single family house for vacation rentals (3 bedrooms and 2 or 3 bathrooms).
Thank you for your insight, @Gurjot Grewal. Much appreciated.
It is very difficult for foreigners to get a loan at a reasonable rate but honestly the RBC bank rates are not that bad. That is probably your best option if you can get it. Another option would be to have an American partner for the mortgage. That gets a bit more complicated of course. If the property is cheap enough, you can also get a personal loan. Not many banks do this anymore but you could look into it. Those rates are pretty high though.
If you are not a U.S. resident, you will be limited to only a few options depending on the asset class.
Canadian banks will only lend to you personally, which is based on your personal DSCR. It's not a scalable option since they only consider a % of the rental income in their underwriting; moreover, exposing you personally to liability issues. Canadian banks will not lend to corporations purchasing U.S. real estate.
Canadian banks are also far less creative; I highly recommend building a relationship with U.S. lenders.
For every house I own in The U.S., I use B Lenders, which are typically 70%-65% LTV, 6.5%+ rates, but they lend to my U.S. C Corps, have no lending limits, and do not require me to have any personal income, residency, credit score, etc., just the down payment.
The best route I've found is closing cash on enough properties that I can group 4+ units, then getting a blanket/portfolio loan across each asset; you get the best terms.
Closing with U.S. financing as a Canadian can be quite the financial gymnastics since you will be required to have your signatures notarized by U.S. notaries; thus, you either have to travel down to The U.S. each time to sign or spend $1,500+ to have the U.S. consulate in Canada authentic the signatures (which cost me a small fortune during COVID), OR, if you have the option of designating a power attorney who is a U.S. resident to sign on your behalf.
This process typically takes 50+ days for a foreign national. It can kill the deal depending on where you are buying, so I always close cash to secure the property, get the best entry price, and worry about financing later.
You've got to pay to play in The U.S., especially after factoring CAD dollar right now... but over the long-term, there is far more opportunity south of the border.
Our DSCR lenders can work with FN's. 30 year fixed and yes rates are higher - mid 7's to mid 8's.
@Lubica J. You have more than one financing option for the purchase of a US property. What is shared by @Gurjot Grewal @Spencer Riche are good intel.
As a mortgage broker in Canada, my strategy for investor-minded clients is to leverage equity in their Cdn real estate, get a heloc or take cash out to acquire real estate in the US. Do you own any real estate in Canada to leverage?