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Today: 22.01.2018 - 14:17:44
   Canada Mortgage Hub Discussion Board -> Mortgage Calgary -> Is it fairly easy to buy a residential property in Canada for U.S. Citizens?
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ostrie

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Is it fairly easy to buy a residential property in Canada for U.S. Citizens?
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Canadian mortgage broker
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psarns

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First of all, every province and territory has different laws, as real estate is by and large a provincially regulated matter. In your case, you will be dealing with the laws of the province of Ontario. The rules in other provinces differ significantly. I am not a lawyer and this is not meant to replace a lawyer's advice. I am however a real estate paralegal and a new home buyer. It's relatively easy, but it is different.There is no restriction in Ontario as to how much land you are allowed to buy as a non-citizen or non-resident. However, non-residents must spend less than six months a year in Canada - if you plan to spend six months or more, the second article I've attached claims you must apply for permanent resident status first, ie. immigrate.If you are obtaining financing, realize that American banks won't finance a Canadian home, and Canadian banks will usually not float a mortgage to a non-resident unless you put up at least 35% down. You might be able to get a mortgage from a US lender through a Canadian mortgage broker, but there aren't many brokers who handle residential property, since everyone just goes to the bank and all banks have more or less the same offers on tap. Mortgages drawn on Canadian banks need to be renewed at the very least every five years and normally more frequently - every year is common. (Renewing is just signing a form at the bank and paying $80 or so for the privilege - and requalifying.) Most banks will pre-qualify you for your mortgage just like in the US. The bank will still want to see the title searches, appraisal, survey, and home inspection before giving final approval, though.Canada has only a small number of chartered banks. They tend to be extremely stable, as are most larger credit unions and a few other entities that don't do business in Ontario so they won't matter to you. Mortgage loan companies will accept borrowers with inferior credit ratings but of course their rates are higher and the requirements more onerous.Housing prices are not low in the Toronto area. The subprime mortgage fiasco in the States seems to have had no direct impact on Canadian real estate values. I personally think prices will go down a bit over the next few years, possibly more in Ontario than elsewhere because of the auto industry problems. It is normal for purchasers to hire a real estate agent who acts on their behalf and who gets half the commission in return. You will not save money by doing it yourself; in fact, you'll probably save money by hiring one, since the commission (paid by the seller) is the same whether you hire a buyer's agent or not, and your realtor can be a fount of good advice. Well-known national real estate chains include Re/Max, Royal Lepage, Sutton, and Century 21. You can also find huge numbers of houses for sale all over this fine land at mls.ca.When you find a house you're interested in, you submit a formal Offer to Purchase to the vendor through your and his real estate agents. Offers to Purchase in Ontario must be written and signed; most real estate agents have pre-written forms that are approved by the local real estate board and contain everything legally required. Most offers are conditional to reception of a satisfactory appraisal, survey, home inspection, condo certificate, and/or financing (whatever applies). You as the vendor suggest the initial downpayment, the further downpayment after conditions have been lifted, the cash to close, what conditions must be satisfied and by when, and the closing date. The purchaser would then either accept or reject or make a counter-offer.You will need a lawyer in Ontario to complete the transaction; I strongly suggest that you go with a law firm that handles a lot of residential real estate. You want a lawyer and a paralegal that does this every day.Closing is very different than in the US and a bit involved - I've attached a link to a law firm's description of closing in Ontario. (Be glad you aren't buying in Alberta and don't have to sign the documents up to three weeks in advance to have any hope of them being registered by closing!) Finally, check with a lawyer or an accountant about whether a non-resident would have to pay capital gains on any increase in value in the property when you go to sell it. I know that a Canadian citizen or permanent resident does not have to pay capital gains on his primary residence, but I don't think that applies to a non-resident, and I wouldn't hazard a guess.Edit to add: by the way, few people outside Toronto refer to the city as the "GTA", and many people outside southern Ontario would not even recognize the abbreviation. Not trying to pick at you, it's just so you know in advance if you're talking to someone from elsewhere.
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nicole_van_vleck

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For Ontario at least there is no restriction on foreign ownership for most real estate. Prices have not declined as much here (GTA) as in places like Calgary, but they are down a bit it has become a more balanced market.I would suggest that you consider a two unit house so someone would be living there to take care of things for the months you are absent. Someone to shovel the 8 inches of snow we just got. You could look for something that could easily be converted back to a single residence if you live permanently in Canada.Alternatively, there is expected to be an excess of condos in the next year due to developers over building. That would take care of the maintainence problem but would be a bit expensive for a few months. There are also condo/hotel options where your condo is operated as a hotel suite when you are not using it.Many US citizens have cottages, but of course they aren't really in the GTA.For most things US law and Canadian law seem much the same, but there are differences. Canadian lenders are more conservative and I have never heard of any seller paying the buyer's closing costs. If you don't have 20% down you will pay mortgage insurance and if it is to be a rental, you may need a bigger downpayment. If it is going to be vacant, there are insurance implications.I could be more specfic if what sort of property you were considering.
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