Buying Real Estate in the U.S.?

Jan 04, 2012

Posted January 2012

Over the last few months, many of our True North Mortgage clients have purchased a second home or vacation property in Arizona, taking advantage of the lower prices and increase in foreclosures in this American market over the past few months. There are fresh signs that the area is starting a slow recovery, with current housing inventory in that market falling to just over 17,000 units, from a high of 35,000 units 8 months ago.

Arizona's strong rental market may have something to do with their recent housing market downturn. In fact, many of our clients are not buying these properties to live in, but as rental properties. For example, purchasing a 2-bedroom condo (1200 sq. ft) in the Phoenix area will cost between $250K to $350K less than a similar-size condo in Canada — plus can be rented for approximately $2400 – 3600 per month (not including typical expenses, such as decor, utilities or condo fees) from November to April.

Financing a U.S. purchase. Purchasing a home or property in a foreign country can be more work (especially the paper-kind) than purchasing domestically, plus there are usually added requirements or restrictions. A typical Canadian buyer interested in obtaining mortgage financing in the United States will require a down payment of between 20-30%, and may incur a fixed rate of approximately 6.5%.

At True North Mortgage, we have a few options for clients interesting in purchasing in the U.S., by tapping the equity in their Canadian home in order to put cash down on a U.S. property. Depending on the lender, we'll help make the whole process easier than you think.

Contact us today — online, over the phone, or at one of convenient store locations. Our highly-trained mortgage brokers are here to help you find the right mortgage solution.