Most of our clients are from Canada – but where are they buying and why?

Clients are from Canada

While America Mortgages has clients from most countries globally, Canada by far is where most of our clients come from.

This is consistent with public information released by the National Association of Realtors; in year-ended March 2020, Canadian’s purchased $9.5B of U.S. residential real estate!

If we assume an average home price of $500,000, that equates to a staggering 19,000 home purchases!

As the top U.S. mortgage specialist specifically focused only on Expats and Foreign Nationals living in Canada, the customer data we have would be considered as the best representation of “real” demand.

In this article, we wanted to dig a little deeper into where they are buying and why.

Here is our data over the past 12 months for Canadian buyers:

  • – Loans funded: 137
  • – Average loan amount: $460,000
  • – Client location: Ontario 52%, Vancouver 33%, Edmonton 5%, Montreal 3%, Others 7%
  • – Top 3 purchase locations: Orlando, FL; Atlanta, GA; Charlotte, NC

Orlando, Florida

Orlando is a natural fit for Canadians, especially those living in Ontario. They share the same time zone, and it’s only a 3-hour flight from Toronto to Orlando. It’s no secret that winters in Canada (and especially Toronto) can be long and harsh, which is why many choose to buy second homes in Florida to escape the cold. Of course, Orlando’s reputation for being an affordable location with social and economic benefits also helps with its popularity. The average home price in Orlando is $293,000 vs C$870,000 for an average home in Toronto. With tourism and job market growth in leisure and hospitality at their highs, it’s no wonder Forbes ranked Orlando as their #1 Best Place to Buy a House 3 years in a row.

Atlanta, Georgia

Atlanta ticks many boxes and is an underappreciated place for many but offers great value for those looking to take advantage of the recent demographic shift inwards for coastal cities. A little unknown fact is that the Atlanta International Airport is the busiest airport in the world, with over 110 million passengers a year! Beijing #2 at 100 million passengers (2019). Let that sink in a little. A city of 500,000 people has the world’s busiest airport. That is because geographically, it’s perfectly located as a travel hub and hence a growing trend for companies to expand their headquarters there – like Google and Blackrock. Meanwhile, the population growing by 12.18% in the last 8 years – 111% faster than the national average of 5.76%. That also means the area’s annual job growth has risen to the rate of 2.15%. Affordability is a key driver for many real estate investors looking for a strong rental yield. The median purchase price of a 3 bedroom single family home at only $190,000, 15% lower than the national average of $222,000.

Charlotte, North Carolina

Charlotte is not an obvious choice to own property in, but digging a little deeper, we found that it has been one of the best cities to own real estate over the past 10 years. The supply of homes is at a 17 year low, 8 years of home price increases with no signs of slowing down. Another fact that surprises many is that Charlotte has the second-most banking assets after New York City, with Bank of America and Wells Fargo having their regional headquarters there. Meanwhile, CNBC recognizes Charlotte as the third-best city in the country to start a business.

It was also surprising to find out from our clients in Canada that Toronto was only a 2-hour direct flight from Charlotte!

How America Mortgages can help…

Unlike a traditional bank, which can only show you their own bank programs, which are by definition rigid and hard to qualify for, we are a solutions provider. We understand your requirements and suggest several loan options that best suit your requirements; this could be from banks or wholesale lenders, which are unknown by many accounts for 70% of the mortgage lending market. For example, if you are an entrepreneur, you can almost assume you would not be able to qualify for a bank loan. The trouble is banks will drag this on for 3-4 months before rejecting your loan. Our Loan Officers are all experts working with Foreign National and Overseas Expat clients – that is all we do! When you tell us your requirements, we already know from our database of 150 U.S. lender programs that best suits your needs. (Also see Can a Canadian Buy a House in the USA?)

For more details, please visit us at www.americamortgages.com

Cash-Out Equity Release. Is now the time?

Cash-Out Equity Release - America Mortgages

There’s something about having cash on hand that feels empowering. Being able to invest in projects, equities, crypto, or a business opens up endless possibilities. It could be to pay off high-interest debt or taking the family on a dream vacation before the children get too old. We hear this daily when speaking to clients that are considering cash-out refinancing.

What is a cash-out refinance?

A cash-out refinance is a mortgage refinancing option in which an old mortgage is replaced for a new one with a larger amount than owed on the previously existing loan, helping borrowers use their home mortgage to get some additional liquidity. You get the difference between the old mortgage and the new and the money can be used however you like. The amount received depends on the equity built up in your property.

How does it work?

Cash-out refinancing depends on several factors which include the value of the property, the amount owed, and how much you can qualify to borrow. Your America Mortgages loan officer can help you determine if this type of financing makes sense from a cost basis.

The potential benefits of a cash-out refinance

  • 1. A lower interest rate on your mortgage – Let’s say you bought your home when mortgage rates were much higher. Refinancing your home can improve your financial situation if you are able to obtain a lower rate.
  • 2. Debt consolidation – The money from a cash-out refinance can be used to pay off other high-interest debts, like credit cards and college loans. This could save you thousands in interest in the long run.
  • 3. Credit score improvement – Building on the previous point, paying your credit card debts off in full using a cash-out refinance can build your credit score by reducing your credit utilization ratio.
  • 4. Tax deductions – If you’re looking to improve your home using the cash from a cash-out refinance, you could potentially qualify for mortgage interest deduction.
  • 5. A cheaper way of paying for your kid’s education – It’s every parent’s dream to be able to put their kids through college, but high-interest student loans can be extremely stressful. Using a cash-out refinance can be a good alternative if the rates are lower.
  • 6. Inheritance – Although we advise you to speak with your attorney or tax advisor, it may be possible to reduce the amount of inheritance tax when estate planning with increased leverage.
  • 7. Take advantage of an opportunity – With the current situation with Covid, there are a lot of opportunities that may not be available once the world goes back to “normal”. Having access to liquidity and being able to act immediately can be potentially life-changing.

So, should you do it?

The truth is, cash-out refinancing can be a good way to improve your financial situation – we think of it as an affordable way to borrow money if you own substantial equity in your home. The money from a cash-out refinancing can even be used to rebuild equity that you’re taking out if you decide to use it on value-adding home renovations.

Interested in cash-out refinancing? America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. That is our sole focus and our expertise.

For more details please visit us at www.americamortgages.com

Vacation homes buoyant as the U.S. prepares to open up.

Vacation Homes Buoyant

Despite the slow reopening of workplaces nationwide, a new report by Redfin shows that demand for vacation homes– otherwise known as short-term rentals –is soaring at a record pace.

One reason for the rise in demand can be attributed to vacationers wanting to keep their distance from strangers in shared hotel spaces. Now, with the developing accessibility of the COVID-19 vaccines, more people are planning their future get-aways. A recent Vacasa review of U.S. vacationers revealed that 59% said they intend to vacation in spring 2021. Additionally, 52% said they would choose to stay in a vacation rental more regularly. A study by the National Association of Realtors also found a 16% increment in second-home purchases in 2020.

Rise in remote work

Another reason for the increased demand could also be due to more affluent families having more opportunities to do their jobs remotely for the foreseeable future. The increase in remote work for individuals in white-collar positions implies that families could leave urban cities and set up for business in more modest, remote towns.

Redfin chief economist Daryl Fairweather said, “The combination of the wealthy becoming wealthier, remote work turning into the new normal, and low mortgage rates is creating an ideal environment for affluent Americans to buy vacation homes,”

“As long as the economy continues to grow, I don’t foresee demand for second homes slowing down anytime soon,” she added.

Fortunes may have genuinely turned for the vacation home market since the start of the coronavirus crisis. But as a real estate investor, what does this mean for you?

From having a stable cash flow to obtaining tax benefits, investing in real estate can have several advantages. It’s also an excellent way to increase wealth over time. New investors can take advantage of this by getting in on this heightened interest for second homes being bought as vacation rentals.

America Mortgages has programs for both Foreign Nationals and U.S. Expats. Our U.S. Expats programs are exactly what you would find at your bank back home. We work with lenders in all 50 states, and we are sure to find the best loan option available for your needs. We also provide solutions for U.S. Citizens who have been “away from home” for an extended period and lack the depth of credit. No U.S. credit? No problem! America Mortgages has loan programs that accept your overseas credit and income. As Expats ourselves, we not only understand the challenges you face living abroad while trying to obtain U.S. mortgage financing, we live it.

Schedule a call with our U.S. mortgage specialist today at www.americamortgages.com

Sources: Redfin & Marketwatch

Did you know 26% of all home sales are newly built?!

Home Sales Are Newly Built

New construction homes have steadily taken a larger share of the pie over the past decade, but during the coronavirus pandemic, there has been a remarkable acceleration. According to Redfin Lead Economist Taylor Marr, there are two main reasons for this: a rise in home construction and fewer Americans listing their houses for sale.

“Homebuilding has become more attractive and profitable during the pandemic because of record-low mortgage rates and strong demand for homes,” Marr claims. “At the same time, many homeowners have chosen to stay and refinance or remodel their existing homes rather than sell them, which has led to new construction taking a larger share of the market.”

In the US, new residential construction projects have increased by 20% each month since the pandemic and reached the highest level since 2006, in March this year. This goes to show that homebuilders are becoming more optimistic and hopeful about the current housing situation, notwithstanding the shortage in lumber and rising costs of construction.

According to Melanie Miller, a Redfin real estate agent in Houston, buyers choosing not to deal with bidding wars prefer new construction homes because builders rarely impose deadlines for offers. Furthermore, they can purchase a house at the asking price instead of bidding at a higher price.

With record-low mortgage rates and strong demand for homes, we think this is an excellent time to invest in real estate. With an investment mortgage, you will usually be able to tell whether you are approved relatively quickly. America Mortgages has pretty cut and dry standards when it comes to getting you approved for an investment mortgage. America Mortgages has loan programs for U.S. Expats with or without U.S. credit. We understand that living abroad often changes factors and your ability to borrow in the U.S. Our loan programs are tailored towards your exact situation.

What are you waiting for?

For more information on U.S. or mortgage loans in other countries, please enquire via email – [email protected].

Source: Redfin

Investors Rejoice! Top 5 Benefits of a Portfolio Loan

America mortgages

Portfolio Loans

Real estate investors looking to scale quickly and expand their residential investment portfolio often run into the same problem fairly quickly – too many financed homes. Most conventional lenders in the U.S. will allow borrowers up to 5 or 10 financed properties either with that lender or financed in general. After that, the available financing is limited or non-existent conventionally. This limits the investors’ ability to scale and grow their real estate portfolio without having more equity. Usually, releasing more equity is either not available or too expensive to make the numbers work. This is exactly where portfolio loans come into play.

What are the basics of portfolio loans?

Portfolio loans cross-collateralize several different properties and can be used to either purchase, refinance, or release equity from a portfolio of stabilized investment properties. Most portfolio lenders have a minimum of 5 properties and a USD $500,000 loan minimum – there is no maximum number of properties or loan amount. This, in turn, helps the investor avoid the 5 to 10 financed properties limitation that conventional lenders have and will instead consolidate them into one loan.

Here are 5 reasons how a portfolio loan is able to help an investor solve the issue of having too many financed homes, and grant them the ability to scale on their own terms and pace.

Top 5 Benefits of a Portfolio Loan:

  • – No capital or property financing restrictions
  • – Portfolio specific underwriting – no personal income underwriting
  • – Non-recourse and interest-only options available
  • – Flexibility and competitive structures with higher leverage and longer amortizations
  • – Ease of managing one loan versus many individual loans

With the underwriting criteria in the investment property market continuing to tighten among traditional lenders, the portfolio option provides a streamlined underwriting approach that focuses mainly on the cash flow of the specific properties.

Portfolio Loan Interest Rates

More often than not, the loans are offered non-recourse, allowing the investor to keep a separation between personal and business assets, with no requirements to document the borrowers’ personal income. For investors focused on monthly cash flow, interest-only options are available.

With the recent news of Fannie Mae‘s reduction in interest in the investment real estate market and the resulting interest rate increase on investment property loans, the portfolio loan terms are usually more competitive from a leverage and pricing standpoint as a conventional investment property loan, with much more streamlined underwriting and less documentation required.

We believe portfolio loans will continue to be a top financing option for clients looking for increased leverage, competitive pricing, and flexibility when looking at options for their real estate portfolio. Our team is available to review the specific scenario and terms best suited for you. Find out all about your mortgage options when you schedule a 15-minute call with our U.S. Mortgage Specialist here: [email protected].

As Millennials exit states with a higher cost of living, now is the time to invest in U.S. real estate in Texas, Florida, and Colorado.

International Mortgage Specialists

The number of luxury home sales rose 41.6% in the first quarter of 2021. According to Redfin, “luxury” homes sell for an average of $975,000, while “expensive” homes sell for an average of $429,000. Low interest rates and record-low home prices are helping many Americans buy high-end houses. This strategy is also helping millennials avoid expensive cities like San Francisco and New York.

Despite high-end properties that are over the asking price are getting multiple offers, according to Redfin agent Katy Polvorosa.

As we see it, it seems like the right time to invest in U.S. real estate in Texas, Florida, and Colorado. Aside from the higher rental yields, these states can provide improved cash flow to investors.

“This is consistent with what we see in America Mortgages, especially with foreign nationals looking to buy investment properties, mainly in Texas and Florida.”

Robert Chadwick

Texas Real Estate

Due to its diverse economy, Dallas real estate is very attractive for people of all income levels. Its low homeownership rate makes it the perfect place to invest. As interest rates rise, renting is becoming more affordable than buying. The demand for rental units has increased over 14% within the last year, making it perfect for investing in Dallas real estate.

Austin, Texas, is also another excellent place to invest in real estate. In the last 5 years, it has come to be known as another tech hub making its housing market very sizable. Its home values have more than doubled since 2010.

There are tons of high-paying tech jobs in Austin. As Austin is getting older, Millennials will become the largest buyers and renters in 2021, and this trend will continue. We believe investing in Austin real estate is a great market, as there is a huge scarcity of homes for sale in Austin, and more Millenials don’t see a value in owning.

Why should you invest in Texas properties?

The Texas real estate market has plenty of investment properties for sale. The real estate market in Dallas, Austin, and Houston is very active, and volumes of trade are high, and housing stock moves fast. This means it is relatively easy to exit investments and find a buyer for your home.

Florida Real Estate

In 2021, Florida is one of the best places to invest in real estate. This metropolitan area is also one of the most visited tourist attractions in the U.S. There are plenty of opportunities in this real estate market. Investors have a choice of targeting the long-term residential or holiday markets with their properties. Both offer strong returns.

Why invest in Florida Real Estate?

Florida’s real estate market is known to some as the hottest real estate market in the U.S. The housing market in Orlando, Tampa Bay, Lakeland, and Ocala is still growing steadily, with prices remaining low. Properties have a good chance of appreciation in the next couple of years. There is a huge demand for single-family homes in Florida, and with a strong renters market, we think this is a great place to invest in real estate and reap its yields and benefits.

Colorado Real Estate

Colorado Springs is a great place to invest in real estate in 2021. Its robust real estate market has continued to grow at a fast pace.

Colorado Springs’s real estate market is relatively affordable, with a median home price of around $320,000 and a monthly rent of approximately $1,600. Its proximity to Denver will make it more attractive to people looking to buy a home there. It is also important to note that the average home price in Denver in 2018 was $500,000. In short, you can buy two homes in Colorado Springs for the price of one in Denver.

Compared to other states, Colorado Springs has proven to be one of the best places to invest in rental real estate. What better time to do this than now when mortgage rates remain low?

At America Mortgages, we have eliminated many unnecessary steps to create a simple and easy process for our clients. We focus only on U.S. Expats and Foreign Nationals living overseas, and we offer over 150 U.S. bank and lender programs direct to our international clients. Our team of U.S. mortgage specialists are ready to help you! Schedule a call with us today!

For more information, please contact [email protected].

Sources: HousingWire & Redfin

Rent prices show largest one-month growth since the beginning of the pandemic!

Investment Property

Rental prices are bouncing back! We see the biggest single-month increase in rent prices since the beginning of the global pandemic. Apartment rental app Zumper reports that the price of a one-bedroom unit increased by 1.1%, and the average rent for a two-bedroom apartment in February rose 0.9%.

Through last year, Covid-19 disrupted the rental scene drastically. One-bedroom units in New York and Maine saw significant drops in rent prices. Even states like Massachusetts, Connecticut, Maryland, and Virginia also saw median rent prices go down during the pandemic’s peak.

There’s still good news for U.S. real estate investors as in just 2 months into 2021, low rental rates have finally reached the bottom. In some cases, like New York City, San Jose, and Boston, it is actually the first time rental prices have increased since the first quarter of 2020.

We think these events have presented an excellent time to secure an investment property or second home. Besides being able to take advantage of the higher rental yields and improved cash flow, property values in these states will likely correct up as the market heats up this summer. What better time to do this than now?

The increase in rates is largely tied to the uptick in mortgage rates that has slowed down the demand for new home purchases and refinances. Notably, year-over-year rate comparisons show that in major cities, there are still some great deals available. In San Francisco, the average one-bedroom is now 24.3% more affordable than it was a year ago, and two-bedroom rentals are 23.6% cheaper.

America Mortgages is committed to helping our clients find the best mortgage solutions. Keen to know what your mortgage options are? With a 97% approval rate for both U.S. Citizens & Foreign Nationals, our global team of U.S. mortgage specialists are ready to help you! Find out all about your mortgage options with us today!

For more information, please contact [email protected].

Sources:Fortune

Great Real Estate Reshuffling

Great Real Estate Reshuffling

According to a survey by Zillow, 1 in 10 Americans has moved in the past 12 months. With the COVID-19 vaccine implementation and the economy and housing market recovering, Zillow predicts that this number could increase to more than 40 percent in 2021; this means that millions of households could enter the housing market in 2021.

What prompted the Great Reshuffling?

A significant cause of the Great Reshuffling is due to the fact that work-from-home became a norm during the pandemic. Homebuyers quickly caught on to the fact that they can live and work in their dream home and location as long as they have an internet connection. Approximately 75% of those surveyed reported moving for positive reasons, such as being closer to their family, friends, or simply living in their desired part of the country.

Many cities, known as “secondary cities” across the country, have seen a massive influx of movers looking to take advantage of bigger homes with lower prices. According to Zillow, there has been an uptick in the number of people moving to the South over the past year.

The rise in people moving to more affordable areas has triggered a wave of first-time buyers. This is especially true in Phoenix, Charlotte, N.C., and Austin. Zillow’s data also showed the highest for-sale inventory climb in 4 major real estate areas – Los Angeles, Chicago, San Francisco, and New York.

We see this as an excellent opportunity for real estate investors, as over the past couple of months, the housing markets outside of the urban areas have flourished. “We have created a process specifically for our overseas clients which is easier, faster, and more transparent than international banks.” Robert Chadwick, Co-Founder of GMG and America Mortgages.

At America Mortgages, we understand our global clients’ needs, and we provide solutions to match their needs. We make investing in U.S. real estate easy. Schedule a call with our mortgage specialists today.

For more information, please contact [email protected].

Sources: Housingwire.com & Realtrends

The Roaring 2020s?

mortgage specialist

The “Roaring 20’s” is often considered as one of the most prosperous times in the West. WWI had just ended, and the housing market’s growth, the development of infrastructure, telephone networks, automobiles, etc., was the centerpiece of growth. America’s wealth more than doubled in the years between 1920 and ’29 with most of the wealth invested into finance and industry but there was enough trickle-down to lower-income earners to help buoy a new consumer culture.

Doesn’t this sound familiar?

In 2020, FAANG stocks (our version of industrial stocks in 1920s) doubled as well!

FAANG stocks Graph

Meanwhile, as the world heads towards being incrementally more vaccinated, we are seeing inflation expectations rise, the first wage growth in over a decade, and a potential $3T infrastructure plan in the U.S. which draws some comparisons to FDR’s The New Deal.

Personally, I find it remarkable how the global macro narrative has shifted 180-degree only one year out from the start of a global pandemic, and also not far from when the discussions among leading economists were ‘when’ deflation would happen, not if. Now consensus, in under 12 months, has gone from deflation to inflation.

If you are looking for evidence that inflation is back, look no further than housing prices. Knight Frank reports that worldwide home prices rose 5.6% in 2020, and CoreLogic says U.S. home prices increased 10.4% year-on-year in February 2021, the highest in 15 years!

Taking some data points from Knight Frank’s survey, look at the annual % change in home prices in the major cities that Global Mortgage Group offers mortgages in.

Can you guess which city had the highest growth in the U.S., U.K., France, Canada, Australia, and Singapore? Read here to find the answer!

U.S.
Phoenix, California+14%
Seattle, Washington+13%
Los Angeles, California +10%
New York City, New York+10%
Atlanta, Georgia+8.9%
Dallas, Texas+8.4%
Miami, Florida+9.2%
Switzerland
Geneva, Switzerland+7%
France
Lyon, France+8.9%
Paris, France+7.7%
Australia
Sydney, Australia+4.5%
Brisbane, Australia+4.2%
Melbourne, Australia +3.6%
U.K.
Manchester, UK+8.7%
London, UK+4.3%
Canada
Montreal, Canada+15%
Toronto, Canada+10%
Vancouver, Canada+7%
Singapore
Singapore+2.2%

For more information, please contact [email protected].

Sources: World Property Journal, High Finance, History.com