Everything You Need to Know about U.S. Mortgages for Canadian Citizens

It is not uncommon for Canadian citizens to live and work in the U.S. both long term and short term. If you have been living in the U.S. for a while now, you might be considering buying a property here. Is this even possible? And what finance options do you have?

Below we take a look at the different financing options for Canadian citizens to buy property in the U.S., including U.S. mortgages for Canadian citizens. We also take a look at how getting a down payment loan can decrease your costs in the long run.

Can Canadian Citizens Buy Property While Living in the U.S?

Generally, Canadians are allowed to own property in the U.S. Each person’s situation is unique, however.

If you are considering buying property in the U.S. as a Canadian citizen, it is important to make sure you don’t infringe the terms of your current visa or immigration status. Ask for the advice of an immigration attorney if you’re unsure about the effect of property purchase on your visa or immigration eligibility.

Reasons Canadian Citizens Might Want to Own Property in the U.S.

There are three main reasons why Canadians want to own U.S. properties:

1. They work on a visa in the U.S.
2. They own a business in the U.S.
3. They travel to the U.S. often.

The U.S., Canada, and Mexico concluded the North American Free Trade Agreement (NAFTA) which allows people in the eligible job categories, who are originally from Mexico or Canada, to work and live in the U.S. This makes business across borders a lot easier and, as a result, it is much easier for Canadian corporations to establish branches in the U.S. as well. Canadian citizens who work for these corporations or who want to start their own business here often relocate to the U.S.

If you are relocating to the U.S., your family will probably come with you and it might be a good idea to think about purchasing a family home. Especially if you are planning on staying here long term.

Many people (referred to as “Snowbirds”) also prefer to travel between Canada and the U.S. chasing the fairest weather. If this is part of your long term plan (or you just like to visit the U.S. often) owning properties in both countries would definitely be beneficial.

Best Ways to Get a U.S. Mortgage for Canadian Citizens in the U.S.

Canadians have three general ways of buying property in the U.S.

Cash

Those who are fortunate enough can buy a property with cash. One of the benefits of buying cash is you don’t need a loan so you won’t pay interest or additional costs. If you are considering buying cash, just make sure your cash flow can take the blow of paying such a big amount. If you can afford it, this is a great option.

Home Equity Line of Credit

Many Canadians already own property back home in Canada. If this is the case, you can take out a home equity line of credit. With a home equity line of credit, you borrow money from the bank against the property you already own. Your Canadian based property, therefore, serves as security for the loan. Using this form of a secured loan will most likely provide a cheaper interest rate and cheaper monthly payments. If you have a property you already own. This could be a good choice in the long run.

Mortgage

If paying cash or getting a home equity line of credit is not an option, you can get a mortgage on the property you want to buy. Canadian citizens can get U.S. mortgages for Canadian citizens. The lender will need proof of your current income and bank statements for a specific period. They will also check your credit history to determine the interest rate they will charge you.

With a mortgage, the property you want to buy will serve as security for the loan. The lender is allowed to take the home (or the equivalent value of the home) back if you don’t pay the monthly installments on the mortgage.

If you choose to take a mortgage, it will be a good idea to provide a down payment. Here’s why.

What is a Down Payment and How Can It Help You Save Money?

A down payment is a percentage of the property value that is paid as a deposit to the lender upfront. A 20% down payment is commonly required by banks, but it may differ with other credit and financial service providers. A down payment of less than 20% on a U.S. mortgage for Canadian citizens requires you by law to take private mortgage insurance for the balance (a.k.a. for the shortfall of a 20% down payment).

A down payment is something that protects the lender and yourself against the risks of property value fluctuations. It can be financially detrimental to have mortgage debt that is more than the market value of the actual house you bought. A down payment will give you breathing room and protect you from this happening in case the property market declines.

But, a down payment can also save you money. Here are the predominant ways in which any size down payment will help you to save money on your mortgage.

Ways Down Payment Can Save You Money on your Mortgage

There are two ways a down payment can save you money:

1. It cheapens your mortgage (lower monthly payments and interest rates)
2. It reduces private mortgage insurance expenses.

A larger down payment leads to less outstanding debt on the property. This could possibly mean the lender offers you a better interest rate as they take on less risk. These two factors combined ultimately leads to lower monthly payments. Having a lower interest rate also means you will pay back less over the lifetime of the mortgage than with a higher interest rate. So you save money in the long run.

If you have a down payment of at least 20% of your mortgage, you won’t have the additional financial cost of having to take out private mortgage insurance. Even if your down payment is smaller than 20%, the smaller the amount you have to take out private mortgage insurance for, the less cost you’ll have.

Mortgage Down Payment Loans for Canadian Citizens in the U.S.

We know not everyone can afford to make a down payment on their U.S. mortgage for Canadian citizens. Especially not up to 20% of the mortgage value. The good news is you can get a down payment loan to help you finance the purchase of your U.S. property. You don’t have to be a U.S. citizen or permanent resident to qualify. Even TN visa holder loans are available to those in need of credit.

A down payment loan is essentially a personal loan you use for the specific purpose of making a down payment.

How Canadian Citizens in the U.S. Can Get a Down Payment Loan

With Stilt, you can apply for a mortgage down payment loan ranging between $1,000 and $25,000 to help you make the down payment you need on your U.S. property. You don’t have to be a U.S. citizen, you only need to fulfill the basic eligibility criteria. You can even use the down payment for your TN visa mortgage. Here’s how it works.

Apply

With Stilt, you can apply online for the loan amount you need. Make sure you supply all relevant information and documentation. The stronger your application, the better your loan offer.

Get Approved

You will receive feedback on your application within 24 hours of submission. If any additional information is required, Stilt will schedule a quick verification call with you.

Once all the boxes have been ticked, you will receive a promissory note and your loan offer. Sign and return that note if you are ready to accept the loan.

Start the Loan Repayment

The loan will reflect in your registered U.S. bank account within 2-3 business days of Stilt receiving the signed promissory note. After using the loan to put down your down payment, the only thing left to do is to repay your loan!

You can make use of Stilt’s autopay option which automatically deducts your monthly payment from your bank account. You won’t need to worry about missing any payments on your down payment loan.

Getting a loan is not nearly as difficult as filing your TN visa taxes. It really is that easy!

Conclusion

Canadians can work in the U.S. and they can own property here too. If you plan on building a long term future in the U.S., get a U.S. mortgage for Canadian citizens and buy the property of your dreams. To help you save money in the long run, make use of Stilt’s down payment loan. It might even help get your U.S. mortgage for Canadian citizens approved. In time you’ll enjoy the best of both worlds being a Canadian citizen and owning a U.S. property.

Frequently Asked Questions (FAQ)

Can Canadian Citizens Get Mortgages in the U.S.?

Yes, Canadian citizens can obtain mortgages in the U.S. Many U.S. lenders offer mortgage products specifically for foreign nationals, including Canadians.

What Are the Requirements for Canadian Citizens to Get a U.S. Mortgage?

The requirements typically include a substantial down payment (usually 20-30%), proof of income, credit history (U.S. or Canadian), and a valid visa or other documentation proving legal entry into the U.S.

Do Canadian Citizens Need a U.S. Credit Score to Get a Mortgage?

While a U.S. credit score can be beneficial, many lenders accept Canadian credit history. Some lenders specialize in foreign national mortgages and have processes for evaluating foreign credit.

What Types of Properties Can Canadian Citizens Finance in the U.S.?

Canadian citizens can finance various types of properties in the U.S., including vacation homes, investment properties, and primary residences.

How High are Interest Rates on U.S. Mortgages for Canadian Citizens?

Interest rates on U.S. mortgages for Canadian citizens may be slightly higher than those for U.S. residents, but they vary depending on the lender, loan terms, and the borrower’s financial profile.

Can Canadian Citizens Use U.S. Mortgages for Investment Properties?

Yes, Canadian citizens can use U.S. mortgages to finance investment properties in the U.S., but terms and requirements might differ from those for primary residences or vacation homes.

What Kind of Documentation is Needed for Canadian Citizens to Apply for a U.S. Mortgage?

Documentation typically includes proof of income (such as tax returns and bank statements), credit history, down payment funds, and legal documents like a visa or passport.

How Long Does the Mortgage Process Take for Canadian Citizens in the U.S.?

The mortgage process for Canadian citizens in the U.S. can take anywhere from a few weeks to a few months, depending on the lender and the complexity of the borrower’s financial situation.

Are There U.S. Banks That Specialize in Mortgages for Canadian Citizens?

Yes, some U.S. banks and international lenders specialize in mortgages for Canadian citizens and other foreign nationals, offering services tailored to their specific needs.

Can Canadian Citizens Refinance a U.S. Mortgage?

Canadian citizens can refinance a U.S. mortgage, subject to meeting the lender’s refinancing requirements, which typically include equity in the property, income proof, and credit history.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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