Buying property or holiday home is one of the top reasons Canadians transfer money to the United States. But wait – can foreigners buy properties in the US? The answer is yes. That said, buying property in the US as a non-citizen is a different kettle of fish.
You can buy and own a property in the United States as a Canadian or a foreigner. Many Canadian individuals and businesses buy property in the United States each year – whether for investment or vacation purposes.
If you're ready to invest in your own American dream home, you'll be pleased to know that your foreign citizenship won't get in the way. The only challenge you might face is navigating the landscape of foreign real estate transactions which comes with its set of tax and financing rules.
Canadians who have an eye on the US housing market often have many questions regarding the possibility of buying property in America.
When buying property in the US, you'll typically need to submit the following paperwork and documents:
Here's a quick step-by-step guide to buying a home in the US as a non-citizen.
You can skip this step if you're paying cash for your home. On the other hand, you can secure a loan with a Canadian or US-based lender if you're financing the purchase. The important thing is to shop around and compare various offers before settling.
The biggest advantage of arranging to finance first is that you know how much you can afford once you're pre-approved. It becomes easier to narrow down your options when shopping for the perfect home.
When you begin hunting for the perfect property, you can streamline your search by working with a US-based real estate agent that knows the territory. Communicate clearly with your agent so they know the exact type of property you want and other details, such as preferred amenities and location.
Sooner or later, you're bound to come across a property that suits your needs. You'll need to submit a fair offer based on market measurements when that happens. Your agent can help secure a better price by negotiating on your behalf.
The seller will review your offer, accept it, decline it, or counter offer. If your offer is accepted, you have taken the first significant step in securing the property you want.
The importance of doing your due diligence checks can't be overstated. Before finalizing the deal, it's crucial to hire a home inspector and have the property appraised so you know exactly what you're getting into. The last thing you want is to buy a fixer-upper disguised as a fully functional home.
If everything is in order, it's time to initiate the real estate closing process. Once you have signed on the dotted line and paid all relevant fees, monies, and taxes, then congratulations, you're now an American homeowner – time to live the American dream!
When buying property as a non-US citizen, keep in mind that you have to play by a different set of rules compared to US citizens. It's essential to understand the real estate tax situation before committing, though the need-to-know details tend to have many twists and turns.
The best recommendation is to enlist professional legal help to get clarification on issues like:
The best way to pay for your property in the USA depends on your financial situation and other factors. Generally, you can pay for your property by getting a mortgage or with cash.
Canadian citizens who want to own real estate in the US can qualify for loans if they earn taxable income. This is because American lenders will consider income instead of residency or citizenship to determine eligibility. However, while it’s possible to get approval, the US mortgage process can be complicated for Canadians.
A simpler alternative would be to apply for a mortgage with a Canadian cross-border lender specializing in cross-border mortgages. Doing so offers the following benefits:
Paying cash for your US-based home is a significantly easier option than financing. If you're making the payment from Canada, you'll need a convenient and cost-effective method of moving the required funds into the appropriate US bank account.
Using a specialist transfer service like MTFX can save you thousands of dollars with exchange rates 3-5% lower than banks.
Register an MTFX account to start sending money and get better value with competitive exchange rates, fast and convenient currency conversion services, and automation technologies that streamline the home-buying process.
If you need to make regular monthly repayments for your mortgage, you can easily set up fast, secure, and automated payments and stick to your loan agreement with minimal hassle.
Whether you need to transfer money once-off or send money regularly from Canada to the USA, the exchange rate is worth keeping tabs on. The impact of different exchange rates on your pocket is difficult to ignore.
Banks are generally not in the habit of offering favorable rates and fees, so turning to a provider like MTFX is the best solution. You get bank-beating rates 3-5% lower (so you can save up to 5,000 USD for every 100,000 USD you send).
Use the MTFX live rate calculator to see how you can reduce costs when sending money internationally.
Foreigners can legally open a US bank account. This makes it convenient when you need to transfer money via MTFX from Canada to the US to cover mortgage payments.
You can sell your home in the US, provided you fulfill your tax obligations. It's best to hire a tax attorney to ensure compliance.
Buying a US-based property does not automatically give you residency. You'll need to submit a separate visa or residence application to gain legal residency.
The home buying process can take anywhere from 30-60 days, depending on whether you're paying cash or financing the purchase.
Using MTFX to send money to pay cash for your home expedites the process since it usually takes 24-48 hours for your money to arrive. This is a convenient way to send money since the MTFX online platform is accessible 24/7.
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