Move To Nanaimo

29 February 2008

Attention readers from the U.S. (and other internationals considering buying property in Canada)

Posted by Ryan Coffey under: Buying; Buying as a non Canadian.; Uncategorized .

Unless you’ve been meditating in a cave for the past year, you’ve certainly heard about all the foreclosures in the United States and how the real estate market down there has plummeted as a result. What you may not know is that it has not had a significant effect on the real estate markets in Canada. The market out here on the west coast, (that’s the part that isn’t frozen in the winter to those of you who aren’t familiar with it) is still going strong. Have a look around this blog and at my website for a good idea as to what is here and what the market is doing right now.

On occasion I get clients from the U.S. who are looking into buying real estate in my area. Sometimes it’s because they want to move to Canada, sometimes they want a vacation home and sometimes they want to buy a place for investment. But the same thing seems to daunt all of them. Buying or selling property feels like a big process if you’re not used to doing it already, but there’s a lot more to think about when buying outside of your country. Getting the mortgage, how taxes will work for you, what kinds of laws are in place and so on.

But here’s the thing: It doesn’t have to be such a challenge! The real problem is that no one person has all the answers as to what the process entails because each professional is an expert on a part of the process and they only get these kinds of clients once in a while so they don’t have the opportunity or feel the need to learn so much about what the whole picture is.

Well, I’m a shoot for the moon kind of guy, plus I’ve lived and travelled all over the place so I know from experience that it can be a godsend at times to have someone break it all down for you when you’re trying to do something like this in another country.

SO, my solution is to start a series of articles for non Canadians (particularly for people from the U.S. as theirs is the market that is next door which happens to be doing so poorly right now) thinking of buying real estate here. My first article on it is written by Michael Ledingham, a Mortgage Broker who you may have seen on this site before, who has given us an outline of what it is to get financing for a property here if you’re not from the U.S.

If you have any questions about that end of things, you can contact him as his contact info is below.

More articles to follow… so keep an eye on this page.

Ryan

Hi Ryan,

For your US residents who are thinking of purchasing in Canada and need to seek mortgage financing, I would suggest that the first thing that happen is to have an understanding of how the property is to be used. Are the people going to be using it as vacation or second home? Or are they going to be immigrating to Canada? This is important to be clear on, as different lending rules and options will apply depending on the use.

Vacation Property or Second Home

Although most Canadians lending institutions are primarily set up to service Canadians, there are lenders who will extend services to US residents who want to buy vacation or second homes. The lenders usually are looking for customers with strong qualifications. The financing will be subject to confirmation of US residency, good credit, income and down payment information. A US Credit Bureau will be searched for the credit information. The lenders may have restrictions to what products are available, such as fixed rate products only. Note: Standard US withholding tax policies will apply.

New Immigrant

Canadian lenders are more liberal to individuals who are immigrating to Canada and wanting to purchase. Although requirements will vary from lender to lender, many want you to show that you have had employment for at least 3 months, and will be confirming immigrant status via VISA and documentation from Immigration Canada. Some programs will grant a loan even with no credit history having been established in Canada. Upon qualification, loans of up to 2 million can be obtained and 95% “Loan to Value” purchases are possible for owner occupied properties.

Qualification Process

1) The first thing to do is have a clear understanding of your goals and what you are trying to achieve.

2) Next is to make sure that you are prepared to qualify for a mortgage. No matter who you deal with, they will not only want to know information about you and your financial situation, they will want you to prove it! So….have this stuff pulled out and somewhat accessible. I’m talking, proof of income/employment, proof of down payment, proof of US Residency or of Canadian Immigration.

3) Be aware that the lender will be qualifying property as well, and not all are classified as the same to lend on….raw land has more restrictions than a more preferred single family home.

4) Work with a licensed Realtor and Mortgage Broker, as they will not only be able to shop you the best deals in the market, but will help guide you and look out for your best interest.

5) Be patient. Mortgage financing is not rocket science, but they are processes that take a bit of time.

( tag on logo for website )

Michael Ledingham - Licensed Mortgage Broker

Tel # 250-755-3014 Ext:224

TF # 1-877-750-3014

Fax # 250-755-1608

Email: m.ledingham@vericoselect.com # 101- 1801 Bowen Road, Nanaimo B.C. V9S 1H1

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