Obtaining a mortgage for a Florida property

RBC is the most common mortgage lender for Canadians. Be sure to check with your real estate professional because they may know of other lenders. Most of the mortgages that you will get in the US as a Canadian will carry a premium, because as a foreign national you will be perceived to be an increased risk. This is because you probably do not have a US Social Security number nor any income or assets in the US. For instance, in the US you need a credit score. You can get your Canadian credit rating but if you default on a US loan, it will not affect your Canadian credit score.

There is another alternative and that is to finance the home in Canada on your Canadian credit and pay cash for the US property. Before you brush that off, think about the added risks you are undertaking if the Canadian dollar drops back to its historic levels. Obviously your payment would remain in US dollars and cost you more Canadian dollars assuming that you don`t have US income this could be a problem. Keeping your loan and payment in Canadian dollars will reduce risk.

If the US dollar drops and you are earning Canadian dollars, well then you would experience a wind fall. You should consult an accountant about this.

Note, most banks currently do not offer loans for properties that are to be considered pure investment properties – only residences, second homes and vacation homes.

Mortgage Application Checklist

All lenders differ on what they need from their borrowers. This list is intended to give you a general idea of what will be required at the time of mortgage application. Please check with your lender for a complete list of necessary information.

• Social Insurance Number and Birth Date – Required of you and any co-borrowers
• Paycheque – Your most recent pay stub showing year-to-date earnings
• T4 Tax Forms – The lender will require 2 years T-4’s and accompanying tax forms
• Employers – The names, addresses, and telephone numbers of your employers for the past two years
• Accounts – You will need the account numbers and current balances of your chequing account, savings account, money market account or any other accounts you may have
• Current Assets – Current assets such as RRSP’s, stocks, bonds or securities. Your lender may require a current brokerage statement with name of the stock, amount per share and number of shares owned.
• Personal Property – Value of personal property including life insurance face value, employee retirement accounts, furniture, cars, jewelry, coins, and other valuable property
• Liabilities – For each loan, provide the lender with the name and address of each creditor and include both the monthly payment and total amount due. Liabilities will include car loans, student loans, credit cards and other installment debt.
• Current and Previous Addresses – If you own a home you will need the property address, current market value, mortgage lender name, account number, current monthly mortgage payment and outstanding balance. If you rent, you will need the property address, name and address of the landlord, the current monthly rent, and previous address/landlord. You will need information about your former addresses if you’ve lived in your current address for less that two years.
• Sales Contract – Bring along a signed copy of that agreement and any amendments to it, a copy of the listing form for the property you wish to purchase and the legal description of the property.

Special Situations

• Self employed or commissioned – bring Income tax forms for the past two years along with a current year-to-date profit and loss statement
• Separated or divorced – Bring a copy of your divorce decree and separation agreement. If you are receiving alimony or child support and you want it to be considered as income, you’ll need proof of this income (cancelled cheques for the past 12 months, for example).

Closing Expenses

Once you have decided on a property, you need to be aware that purchasing involves both one-time costs and monthly expenses.

The largest one-time cost is the down payment.

Closing Costs, are incurred by both the buyer and seller, and are necessary to complete the purchase, but are outside of the purchase price for the property. Fees, types of services provided, and procedures required in the closing process will vary.