Canadian resident- How to buy a home in USA?

[Lycious]

Hello,

I'm a Canadian resident but am interested in buying a home in the U.S.A. Please assist me in this process and provide any information.

1. Can a Canadian resident buy a home in the U.S?

2. Can we get a mortgage in Canada to buy in the U.S?

3. What are the process of this if possible?

4. Anything relating to Tax I should know about?

5. Can I rent out the property once purchased?

6. Would a property manager/agent be required if I want to rent out my property?

7. What would the general cost be for this?

Any help anyone can give me on this is greatly appreciated. Thanks very much.

[Steven]

1. Can a Canadian resident buy a home in the U.S?

Yes, you pay money, take title, no different than anyone else.

2. Can we get a mortgage in Canada to buy in the U.S?

Not if you're a Canadian resident, and getting mortgages at the moment even for US residents is hard (which is why the real estate market is in freefall). But you can get a bank loan in Canada, so if you can make a large down payment you can do it that way. You could take out a second mortgage on your own house in Canada perhaps.

4. Anything relating to Tax I should know about?

Property taxes may be higher because you are non-resident, this is especially the case in Florida but other States also have smaller "homestead" exemptions that you will not qualify for as a non-resident. Any sort of sales tax rebate that a State may have (and they are rare) you would not qualify for.

5. Can I rent out the property once purchased?

Yep. Be aware of State laws on landlord responsiblities, etc.

6. Would a property manager/agent be required if I want to rent out my property?

No, but there are tons of them about, especially in places like Florida and Arizona. You're not the first person to have this idea.

7. What would the general cost be for this?

A property manager? Depends on what services you're after, if you just want them to check the property then it's peanuts, but if you want them to find renters and do repairs then they usually charge a commission plus costs. Shop around, but use someone reputable.

Any help anyone can give me on this is greatly appreciated. Thanks very much.

Main catch - you can only stay in the US up to six months (183 days) in any calendar year in the B-1/2 entry category that is used for visitors. (I've met many retirees in the US who do overstay, but given the current USCIS mindset, I personally wouldn't risk it.) Whenever you cross into the US and say you've got property there, make sure you have evidence that you do not live there other than on a temporary vacation basis.

Plus I'd be careful about buying property just because it appears cheap, buying distressed housing can be risky. Some of these places that have gone down the tubes in the past couple of years aren't coming back, IMO. Especially in places like Michigan, for example.

[Lycious]

Wow, thank you Steve for your help. This is great information and very detailed.

If I come up with anymore questions, hopefully I can get your advice again.

Thank you again for your help.

Sharon

[Steven]

Oh, one other thing, if you plan on taking personal effects into the US, bear in mind they are subject to duty because you are not resident there. This is not as big a deal as it sounds because of NAFTA, so if the furniture, etc. you take was made in Canada, the US or Mexico you won't have a problem. However if you have a Japanese TV or something, that will be subject to duty.

Edited to say: this is not as big a deal as I first thought, only really matters if CBP thinks they are new, if they look used and are over a year old they are exempt anyway.

[dually]

Last time I spoke to a loan officer here, he was more than happy to provide a mortgage to non-resident foreign nationals. The qualifying requirements are simple: 30% down and a current US bank account. The large down payment is enough security for lenders such that they don't require proof of foreign income or assets(which is problematical to do anyway). I haven't checked, but the bank will likely want you to get a Taxayer Identification Number from the IRS. That is of no consequence unless you have income from the property (rental), or sell it, as they will want to know if there's a taxable capital gain.

I should add - the loan rate is about 2% higher (I think) than an equivalent "standard" loan

In California there are no extra taxes for Canadians

[keisha1103]

Can Canadians get a mortgage in the US for a seasonal home or do we have to get the funding from Canada?

Would appreciate any information anyone can provide.

Thank you.

[dually]

You can get a mortgage loan in the U.S. for a seasonal home. But ask your lender at home about the rate they would offer - it would likely be a personal loan since the property would be in a different country.

[keisha1103]

Thanks very much dually. I will be checking on that. Just spoke to a lender in the US and the rates seem higher than in Canada but will have to check all the ins and outs before we jump in head first.