As spring arrives across the U.S., Canadian snowbirds are heading back north. But before the last bag is packed, many are taking advantage of the still historically low interest rates in the U.S. to purchase a permanent home or home away from home. For Canadians purchasing Treviso Bay this is some great need to know information!
At Pinnacle Property Group, we want to ensure that Canadian clients are comfortable with the home buying process in the U.S. Whether Canadians are purchasing a vacation home or investment property, RBC Bank has Cross-border Mortgage Specialists dedicated to providing Canadians with expert advice.
Understanding the U.S. and Canadian Economic Climate
In the years since 2007 when the U.S. housing bubble burst resulting in rock-bottom real estate prices, Canadians have been taking advantage of historically low rates by purchasing real estate. But U.S. home prices and interest rates are slowly creeping back up and the Canadian dollar is fluctuating. The window to get a great deal on real estate in the U.S. is slowly shrinking, but is by no means closed. Now is still a great time for Canadians to purchase a home in the U.S., particularly as the loonie is predicted in many reports to fall further in value by year’s end.
Canadians purchasing Treviso Bay should also consider the extreme bitter cold that swept the U.S. and Canada this winter. This has potential to drive more Canadian homebuyers to popular snowbird areas such as south Florida next year. In 2013, Florida garnered 39 percent of Canadian purchases, followed by Arizona with 24 percent and California with 8 percent.
Importance of Cross-Border Home Buying Partners
Down payments, taxes, insurance, mortgages – There are many intricate moving parts for Canadians to consider when purchasing a home in the U.S. We want to ensure you are prepared and help you avoid unnecessary hassles by selecting cross-border partners whenever possible and following these tips:
- Work with a bank that understands the financing options for Canadians. This can be the most time consuming part of home buying. As the only national lender dedicated to Canadians purchasing real estate in the U.S., RBC Bank offers valuable in-market expertise. RBC Bank provides mortgage lending in all 50 states and is able to use clients’ Canadian credit history to help them secure financing for U.S. real estate purchases.
- Partner with a tax advisor or tax attorney. Choose someone familiar with both Canadian and U.S. tax laws who can provide advice on the tax consequences and how to minimize tax liability for you based on financial status.
The Economic Benefits of a U.S. mortgage for Canadians
According to the National Association of Realtors, the majority of Canadians purchase their U.S. homes in cash. If you plan to do the same, it may be economically beneficial for your to consider financing the purchase of the home from RBC Bank. The one-time foreign exchange costs of converting Canadian dollars to U.S. dollars can really add up. For example, consider that it takes approximately $10,719 Canadian Dollars (CAD) to equal $10,000 U.S. Dollars (USD) and you are purchasing a $250,000 home in the U.S. Foreign exchange expenses could cost almost $18,000 in additional CAD to purchase the home.1
By financing the purchase of the home from RBC Bank, Canadians purchasing Treviso Bay can avoid some of the initial one-time exchange costs, paying the exchange costs only on the funds they need for the down-payment and possibly some other one-time purchase and financing costs.
U.S. Mortgages from RBC Bank
Getting U.S. mortgages can be simpler than you might expect and comes with other advantages including no prepayment penalties and the opportunity to build credit in the U.S. RBC Bank specializes in mortgage lending for Canadians and you will never pay a foreign national rate with them. Plus, they can provide you with a mortgage pre-qualification so you get shopping for a home with confidence.
Become the go-to real estate agent for Canadians working in the U.S.
Canadian purchasing Treviso Bay need a real estate agent that understands both sides of the border and has partners who can provide guidance for the specific issues associated with cross-border buying and selling.
Pinnacle Property Group is positioned to help you make the best choices for your real estate purchase. Give me a call and allow Pinnacle Property to guide you through.
Roberto Lee, Managing Broker
1For illustrative purposes only. Exchange rate as of 4/18/2014 17:51 p.m. Eastern time for $10,000. Foreign exchange rates are subject to change and can only be guaranteed when foreign exchange is purchased or sold. Actual exchange rate and other costs subject to the amount of dollars being exchanged.