Buying an Investment Property in the U.S.

Published on 29 August 2022, 07:22:56 AM

Your new investment property in the U.S. is a gem. It’s a surefire bet, with rent enough to more than cover the mortgage, utilities, and expenses. You can add generously to your retirement nest egg, and maybe even live down south part-time. 

Only one thing remains — convincing a lender to give you a mortgage.

Your good credit score aside, what you don’t know about getting mortgages for an investment property in the U.S. could leave you worried.

Buying an investment property in Ontario, in case you change your mind on investment property in the U.S. 

International Loans for Investment Property in the U.S.

What’s so different about mortgages for international buyers in the U.S. is this:

• 20% down could be required if you borrow a mortgage loan from a U.S. lender. On the upside, mortgages are open, meaning you can repay your loan at any time, without prepayment penalties. And, since you are only making an initial down payment, when U.S. exchange rates are low, your Canadian dollars go further. 
• Mortgage loans for an investment property in the U.S. may be compounded monthly, instead of semi-annually like most Canadian mortgages.
• Doing the paperwork for an investment property in the U.S. takes time when you’re an international buyer. Ensure closing deadlines are long, and your co-investors patient.
• Amortization periods can be longer. Taking longer to pay, say for a 40-year amortization period, instead of 25, means you’ll be making interest payments for a long time before the principal goes down by much. 

All that aside, investment property in the U.S. can be a lucrative opportunity. Real estate analysts report a few months of solid rentals in a sunspot like Florida can more than cover your annual expenses.

Refinance your mortgage to buy investment property in the U.S. 

Documents for Buying an Investment Property in the U.S.

The documents you need to prove you are a reliable credit risk can also be demanding. For starters, you could be asked for your Canadian passport, an international credit report, and at least a two-year record of residency in the U.S. and employment income. That’s in addition to the usual two years of income tax assessments, and proof of your down payment and agreement of purchase and sale.

How Cross-Border Mortgages Work

Instead of borrowing from lenders in unfamiliar territory, how about a cross-border mortgage? BMO and RBC are just two of Canada’s major lenders who arrange mortgages in Canada for investment property in the U.S. Some even offer cross-border tax advice.

BMO’s Gateway Program offers mortgages of up to $2 million USD, with fixed or adjustable rates. Self-employed business owners and retirees are eligible, along with salaried employees. You’ll need to provide proof of Canadian citizenship (your SIN), a U.S. qualifying visa if you have one, and property insurance. 

Get a private mortgage in Canada. 

Assets and investments can make the difference between being accepted and turned down. Muster bank account and investment statements for the past two months, RRSPs, and lines of credit you plan to use to pay closing costs or legal fees.

RBC can fund cross-border mortgages for investment property in the U.S. in almost any state, for up to 10-year terms. Maximum amortization periods are 30 years, and you can make lump sum payments whenever you like. Like BMO, and most lenders on investment property in the U.S., down payments are 20%. Don’t forget closing costs and legal fees. 

It all adds up to one sweet investment.

Close Investment Property Deals for Less in Ontario

Axess Law has virtual real estate lawyers throughout Ontario who can review offers to purchase to include essential clauses that give you the right to walk away by mutual consent. When you’re ready to buy Ontario property, our licensed lawyers liaise with your lender to prepare the mortgage documents you need. 

Check out private mortgage rules in Ontario. 

We contact sellers’ lawyers if you need more time to get a mortgage for an Ontario property. You can sign closing documents at any of our conveniently located Axess Law locations in Greater Toronto Area or Ottawa. Or e-sign real estate documents via remote conference call with our virtual real estate lawyers.

Write legally binding offers to purchase. 

Your lawyer will search the title to your new property, and advise you if construction liens or financial encumbrances threaten to delay or block a real estate deal. We liaise with your lender to discharge existing mortgages, and transfer the final deposit and payment to the seller’s mortgage lender or bank account.

Stop mortgage fraud with title insurance. 

Axess Law Makes Legal Services Affordable 

Our flat fee rates are affordable, and have no hidden surprises or extra charges. Our fees are all inclusive. Selling a home costs $799.99 and up plus HST, and buying is only $999.99 and up plus HST if you’re the buyer. And, for a modest title transfer lawyer fee of $649.99 and up plus HST, you can add a family member to the property for a modest title transfer lawyer fee. Axess Law bills you for only the basic legal services you need. Your itemized statement of adjustments is fully explained, and we answer any questions you may have.

Hiring a real estate lawyer (Ontario). 

Virtual Lawyers for Investment Properties

No time to meet in person? No problem. Axess Law has virtual real estate lawyers who can meet online, via remote video conference call, any time that’s convenient for you. We can review your agreement of purchase and sale, or close sales transactions you’ve already committed to. 

Axess Law uses only secure, confidential video conferencing software. You can e-sign online, or drop by any Axess Law office to sign final legal documents for your real estate transaction. 

Our virtual real estate lawyers can connect with you anywhere in Ontario. Circumstances permitting, in-person appointments are available at open Axess Law offices in Greater Toronto Area or Ottawa, at times convenient for you.

Book Video Calls or Appointments Online

Call us for legal representation when you buy investment properties from Canada. Axess Law’s experienced legal team makes day or evening appointments, 7 days a week, to suit your lifestyle. Book online with our easy web form, or call our 1-647-479-0118 lawyer line (toll free to 1-877-522-9377) to make appointments today.

We’re easy to find. Axess Law has open law offices in Greater Toronto Area and Ottawa, with onsite parking and transit access nearby.