With the economic crisis experienced in U.S. and other countries all over the world, businesses, real estates and other economic activities had been suffering from melt-downs. Lender policies had been diverted to several changes. Mortgaging rates increased, thus making Canadian and other investors difficult to purchase properties. Fortunately, the lending environment serves as a primary solution in the real estate world.
The loaning or lending system lays corresponding requirements for foreign investors, mostly Canadians, to be able to apply for the said loan. Also, before giving them the guarantee, they must state their purpose for loan, the definite amount to be lent, and the assurance and compliance for the returning payment. All these terms and conditions must be met by the client requesting for the procedure.
Listed are some of the lending discrepancies between the U.S. and Canada:
In the United States
- Banks in all over the U.S. varies in loan guidelines and regulations, therefore, make sure to familiarize yourself with the policies before applying. Policies differ from one another due to federal laws.
- Licensing for brokers diverge from a state to another. In some places licensing for mortgage brokers are not required.
- Bank policies are controlled by the federal and state level, therefore, making the approval of loans easier and less strict.
- Rules and regulations of all the banks across the country are managed by a federally-regulated Bank Act.
- Five major banks are controlling all the other banks in the country. These banks are allowed to approve loans and mortgages.
- Brokers are required to have vast trainings in order to accomplish a licensing exam, however other provinces does not follow this policies.
Financing a property involves time and effort, and of course resources. For Canadians who have the intentions of buying a property in the U.S., here are the following methods that can help you in funding your assets.
- When mortgaging a property in the United States, it is better to use a U.S. based bank that is owned by a Canadian bank such as RBC Centura.
- Buying out a property through cash is sensible to avoid cross-border financing arguments. Though not possible for some buyers, this method will aid you in the future for sure.
- Generate a U.S. corporation with assets which can acquire a mortgage from the lender.
Be educated with the different taxes as well as other expenses, for you to be prepared beforehand and avoid issues in the future. You don’t want hassle in the midst of vacation, right? Learn all about the things contained in purchasing a property. If in doubt about something, ask questions and verify things.