Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

If you frequent the U.S. every year – as many Canadians do to escape the frigid temperatures of the winter – you may have considered buying a property for your own use rather than having to scramble to find accommodations for your holidays. You may even choose to rent out your place on short-term rentals during times of the year that you are not occupying the premises in an effort to help pay the mortgage.

Whatever your reason for wanting to purchase property in the U.S., there are a few factors you need to take into consideration. 

The U.S. Mortgage Broker

Most likely, you’ll need some financial assistance to help fund this large purchase. As such, you will require some help from a mortgage broker to help facilitate the mortgage process. But should you use the help of a Canadian broker or someone from the U.S. who may be more familiar with mortgages in the local area you plan to buy in?

Some big banks in Canada offer cross-border mortgages for Canadians looking to buy in foreign markets. There are some lenders and banks in Canada that have a significant presence in the U.S., so they may be able to help provide you with a mortgage to fund a U.S. real estate transaction, depending on your situation. But some Canadian lenders may not provide such services, so you will have to do some research. 

On the other hand, taking out a mortgage with a U.S. bank may be a good solution too. Either way, there are some significant differences between Canadian and American mortgages. 

That said, a knowledgeable and experienced mortgage broker will be able to help you choose the right mortgage program that is best suited for your particular situation, so their help is invaluable. These professionals are also in contact with a number of banks and alternative lending options, so they will be able to do comparison shopping to find a mortgage and lender with the best rates and terms. 

When submitting a mortgage application, avoid these common mistakes.

Different Laws In The U.S.

Many people make the mistake of thinking that the laws surrounding the purchase and sale of real estate are the same in the U.S. as they are in Canada. While it’s true that there are some similarities, there are also several differences that Canadian buyers need to be aware of. 

For instance, there may be rules with homeowners’ associations (HOAs), similar to those of condo associations here in Canada surrounding their right to choose their members and to establish legal expectations of homeowners. And when it comes to your heirs inheriting the property in the event of your passing, there may be U.S. probate laws that can slap your beneficiaries with an expensive legal bill. These probate laws may also enforce long wait times during which the asset is frozen before they can inherit your home in the U.S.

In general, you will want to get familiar with the federal, state, and municipal regulations when it comes to foreign homeownership in the U.S., taxes, and property restrictions, as they can be different from what is required in Canada.

Understand The Costs Of Owning A Property In The U.S.

Knowing how much owning property in the U.S. is going to cost you is an obviously important factor to consider. For starters, you’ll want to do see how much a property will cost you after having calculated the exchange from American to Canadian dollars. There are also common closing costs that will need to be considered, including:

In addition to the mortgage payments, there are also ongoing fees that you will need to cover, including the following:

  • Utilities
  • HOA fees (if applicable)
  • Community fees
  • Property taxes
  • Homeowners’ insurance
  • Security
  • Repairs and maintenance

Of course, don’t forget to factor in the travel expenses you will incur to get to and from your U.S.-based home. 

What Documents Do You Need To Get A Mortgage In The U.S.?

Much like buying real estate in Canada, you will need to submit certain documentation when purchasing a home in the U.S. But as a non-resident of the U.S., the paperwork required may be more demanding compared to when buying domestically. You may be required to apply for an Individual Taxpayer Identification Number (ITIN) as per the IRS as a Canadian buying the U.S. In order to do so, you will need to supply a number of original documents that will be outlined on the application form.

In order to get a mortgage in the U.S. from an American bank (if that’s the route you choose), your tax documents required may be different from what you may need to provide here in Canada as well. 

Having said all that, here are the documents that you may need to provide in order to complete a real estate purchase in the U.S.:

  • Proof of a down payment
  • Real estate contract
  • Real estate agency information
  • Copy of your passport
  • International credit report
  • 2 years of employment history
  • Recent pay stubs
  • 2-year history of residency
  • 2 years worth of tax submissions 

Should you choose a fixed or a variable rate mortgage? Learn more here.

What If You Want To Rent Out The Property?

Odds are, you won’t be occupying your home in the U.S. full-time. Even if you wanted to, you wouldn’t be able to because there are laws that govern how long foreigners can stay in the U.S. at a time. Generally speaking, that time frame for Canadians is 6 months.

During the time that your home is vacant, you may want to rent it out to help pay the mortgage and cover operating expenses. If you plan to rent out your vacation home when you are not there, you will want to double-check the local laws to see if this is allowed. Even if this practice is permitted, there may be a rule that puts a limit on the length of time that a home can be rented out. 

Some HOAs may not permit rentals, whether short- or long-term, so you will want to find out if a condo (if that’s the type of place you plan to buy) that is governed by an HOA allows rentals of any type before buying. 

Final Thoughts

Having a place of your own to retreat to whenever vacation calls is extremely convenient. You can leave all your belongings there and not have to pack so heavy, and you can really establish a home away from home. But in order to make this work, there are a few important details you will want to become familiar with first. Get in touch with a seasoned real estate agent and mortgage specialist to help fill you in on everything you need to know about buying a home in the U.S. as a Canadian. 

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

More From This Author

Special Offers

More From Our Experts
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.
Good Debt vs Bad Debt

By Lisa Rennie

What's the difference between good debt vs bad debt? What factors determine whether debt can be considered good vs bad? Find out...
Our Review Of The Neo High-Interest Savings Account In 2023

By Trevor O'Hagan

The Neo financial savings account is the perfect way for you to build an emergency fund, save for a down payment, or build a nest egg.
Best Air Miles Credit Cards In Canada

By Lucas Elliott

Discover the best air miles credit card in Canada for 2023. Compare annual fees, bonus earn rates, sign-up bonuses, and travel perks.
Borrower Rights: High-Interest Loan Legislation In Canada

By Mark Gregorski

To better protect vulnerable borrowers, provinces have enacted legislation that sets boundaries on what alternative lenders can and can’t do.
Best No-Fee Credit Cards Canada 2023

By Daniel Schoester

Our guide covers the 9 best no-fee credit cards in Canada, comparing cash back rates, welcome bonuses, insurance, and eligibility to help maximize rew...
Exclusive Offer: Get $50 Cash Back With A Mogo Line Of Credit

By Priyanka Correia

We've have teamed up with Mogo; a leading financial services company in Canada to offer an exclusive $50 cashback offer you won’t find anywhere else!

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card