Canadians Finding That American Mortgage Money Is Scarce
by: Brian.Brady on 2008-03-29 @ 12.19:00 pm
Canadian investors have been flocking to the California coastline and Arizona desert to buy prime
In January of 2007, a Canadian investor, buying a $300,000 (US) property in Long Beach, CA, , would have to pay $352,600 (Canadian). That was based on an exchange rate of $1.17553 Canadian to $1.00000 (US). Today, the exchange rate has dropped to $.98188 Canadian for one US dollar. That means that the same property in Long Beach, would costs $294,300.
The vacuum, however, lies in the mortgage financing for Canadian investors. Mortgage companies require as much as 35% down payment for Canadian citizens buying a vacation home in America. In some areas (California, Arizona, Nevada, and Florida), that financing is about to be suspended. The leading bank suspended its loan programs, for Canadian investors, in those four states, as of April 1, 2008.
Canadian investors are also learning that all American mortgage brokers are not created equal. Rates for foreign nationals (which is what the American banks call Canadian citizens) are traditionally 1% higher than American residents receive. That means that today, the mortgage rate for Canadians is between 7-7.5%; quotes from mortgage brokers, promising materially lower rates, generally don't pan out. The result? Frustrated Canadian investors are left at the altar like the husband in "The Runaway Bride".
The American mortgage crisis is causing banks and lenders to scrutinize every single loan application with a watchful eye; Canadian investors are losing out. We advise foreign nationals to find an American mortgage broker, with a proven track record, rather than to jump at the "lowest" rate quote.
Brian Brady finances investors from all over the globe. References here. Loan applications, for foreign investors, can be made online. 
Meta DataSocial Bookmarks
Comment from: Home Financing For Bad Credit [Visitor] · http://ncave.com Why would Canadians have to pay a higher interest rate? It seems like they would let Canadians have the same interest rate we have, since they are having trouble finding qualified buyers right now.  Permalink 2008-04-02 @ 10.08:03 pmComment from: Brian Brady [Member]  Excellent question. The answer is simply risk. Foreign nationals don't live in the States. There is a higher propensity to "walk away" from the loan obligation if the consequences are less. Foreign nationals have little to lose other than the money they've invested. Having explained that, I believe that 30% down payment mitigates most of that risk and would agree with you
Permalink 2008-04-07 @ 11.05:38 amComment from: vickiinAlberta [Visitor] We are trying to buy a condo in Palm Springs. We have been preapproved by a broker. Put an offer in on a short sale that had been on the market for over 370 days, only to have the lender decide to foreclose. Ours was the only offer received during that year. I dont get it. Wouldnt lenders want to move inventory where at all possible and avoid foreclosure? Permalink 2008-04-19 @ 12.11:00 amComment on this article This post has 4 comments awaiting moderation. |
American real estate at a bargain. The strong Canadian dollar, while inopportune for Canadian manufacturing firms, is giving Canadian investors built in downside protection when they buy American real estate. I explain that 
