The following information is specifically for our United States’ neighbours who are interested in financing a property purchase in Canada. If you are interested in information about financing but are from elsewhere around the world please refer to Financing A Property Purchase In Canada From Overseas.
As Canada and the United States share the largest border in the world, citizens from both sides of the border travel back and forth extensively. And not surprisingly a large number own, or wish to own, properties in the other’s country. Financing for these cross border purchases is quite easy due to the close ties between our two nations.
There a two basic methods to finance a purchase in Canada if you live in the United States:
- Finance the purchase through a U.S. lender, perhaps using the property you own in the U.S, and buying the property in Canada outright.
- Obtain financing via a Canadian lender.
As an American citizen, a purchaser is able to finance up to 80% the value of the property in Canada. Qualifications that are used for Canadian citizens would be applied. The approval would be based on your income, credit history, and current debt load.
Documents typically needed:
- A completed application.
- Confirmation of your income via a letter of employment, recent paystub or tax filing.
- Confirmation of your downpayment via 3 months of bank statements. Any irregular deposits would have to be verified as to source.
- A credit bureau will be obtained and reviewed by the lender.
That is basically it!
Please note that in Canada most lenders do have what we call a “sliding scale” for higher valued properties. You may be able to borrow 80% of the value if qualified for modestly priced homes. However, for properties over $1 million they will be treated to this “scale”. As an example, the lender may only finance 80% of the first $750,000 and 50% of the balance of the purchase price. So the higher the value the less “overall” percentage you will be able to finance.
This information is to be relied upon as a general guideline only.
Please contact me for a more detailed discussion about your specific needs.