During our recent live webinar on “How to finance U.S. Real Estate as a Canadian Investor,” our expert host, Kyle Mazzuchin (KM), and America Mortgages’ CEO Robert Chadwick (RC) received numerous questions from participants. For those who missed the opportunity to join the webinar, it is available here.
To address these questions, Kyle Mazzuchin and Robert Chadwick have set aside dedicated time to provide insightful answers.
Remarks have been edited for clarity and brevity.
Q: Can Canadians sign mortgage documents remotely via DocuSign/zoom for properties purchased in New York state?
KM: Yes, Canadians can sign mortgage documents remotely using platforms like DocuSign or Zoom for properties purchased in New York state.
Q: As a Canadian, what would be the best way to register my property? Using a company or personal?
KM: The best way to register a property as a Canadian would depend on various factors such as tax implications, liability protection, and personal preferences. Consulting with a legal advisor specializing in cross-border property ownership would be advisable to determine the most suitable approach, whether registering under a company or personally.
Q: How do I go about opening a cross-border bank account? Would America Mortgages help me with that?
KM: Opening a cross-border bank account typically involves contacting banks that offer such services and fulfilling their requirements, which may include proof of identity, residency, and other documentation. America Mortgages may provide guidance or assistance in the process, but opening a bank account would ultimately be handled by the individual and the chosen bank.
Q: Are there any preliminary steps I can take to ensure the approval process goes smoothly?
KM: Preliminary steps to ensure a smooth approval process may include gathering necessary documentation such as proof of income, assets, and credit history, as well as staying informed about the requirements and expectations of lenders.
Q: How long will it take for a non-US resident to get pre-approved, and how much does a pre-approval cost?
KM: The time to get pre-approved as a non-US resident can vary depending on various factors such as the complexity of the application and the responsiveness of the applicant. There is no cost to go through the pre-approval process.
Q: As a foreigner or non-U.S. citizen, what is the maximum LTV available? And is the LTV dependent on income?
KM: The maximum Loan-to-Value (LTV) available to foreigners or non-U.S. citizens may vary by lender and other factors. Income could be one of the factors considered in determining the LTV, but it’s not the sole determinant.
Q: Who pays for the appraisal process?
KM: The party responsible for paying the appraisal process may vary depending on the terms negotiated between the buyer and the seller or as determined by local real estate customs and regulations, though typically the buyer pays this cost.
Q: What is the interest rate?
KM: The interest rate on a mortgage would depend on various factors, including market conditions, the borrower’s creditworthiness, the type of loan, and other factors. It’s advisable to inquire with the lender for specific interest rate information.
Q: Does anything change if I have an LLC?
KM: Having an LLC (Limited Liability Company) could potentially impact certain aspects of property ownership and financing, including liability protection and tax considerations. It’s recommended to consult with legal and financial advisors to understand the implications fully.
Q: If I already owned 4 properties in Canada, am I eligible to get finance from you guys? Is there a limit on the properties I own?
KM: Eligibility for financing and any limits on the number of properties owned may vary by lender and other factors. It’s advisable to inquire directly with the lender for specific eligibility criteria.
Q: What are the fees that you charge, and what is the range of current rates?
KM: Lenders may charge various fees associated with mortgage loans, including origination fees, application fees, closing costs, and others. The range of current rates would depend on market conditions and other factors. It’s recommended to inquire directly with the lender for fee and rate information.
Q: As a follow-up, what is your LTV on a refinance?
KM: The Loan-to-Value (LTV) ratio for a refinance would depend on various factors, including the lender’s policies, the borrower’s creditworthiness, and other considerations. It’s advisable to inquire directly with the lender for specific LTV information regarding refinancing.
Q: Is there any pre-payment penalty?
KM: Pre-payment penalties, if applicable, would depend on the terms of the mortgage loan and the policies of the lender. It’s recommended to review the loan agreement carefully and inquire with the lender about any pre-payment penalties.
Q: How about a restaurant business with property? i.e., rent $14000 and ask for a price of $2.5M with business. How do we calculate this?
KM: Calculating the value of a restaurant business with property would typically involve factors such as the property’s market value, the business’s profitability, location, lease terms, and other considerations. Consulting with a real estate appraiser or business valuation expert would be advisable to determine an accurate valuation.
Q: Can you get a mortgage in a U.S. C-Corp?
KM: Whether a U.S. C-Corporation can obtain a mortgage would depend on various factors, including the corporation’s financial standing, creditworthiness, and the lender’s policies. It’s advisable to inquire directly with lenders regarding mortgage options for corporations.
Q: What are your commercial mortgage rates? How many bps over the ten-year treasury?
KM: Commercial mortgage rates and their relation to the ten-year treasury rate would vary by lender and market conditions. It’s recommended to inquire directly with lenders for current commercial mortgage rates and their basis points (bps) over the ten-year treasury rate.
Q: What is the maximum loan-to-value a Canadian can get on a DSCR loan cash-out refinance for 2 units or more?
KM: The maximum Loan-to-Value (LTV) ratio for a DSCR (Debt Service Coverage Ratio) loan cashout refinance for Canadians on properties with 2 units or more would depend on various factors including the lender’s policies and underwriting criteria. It’s advisable to inquire directly with lenders for specific LTV information in this scenario.
Q: Does approval guarantee funds release? How reliable is it by itself? Is it binding?
KM: Approval for a mortgage loan does not necessarily guarantee funds release, as final disbursement may be subject to additional conditions and requirements. The reliability and binding nature of approval would depend on the terms and conditions outlined by the lender. It’s recommended to review the loan agreement carefully and seek clarification from the lender regarding the approval process.
Q: Is it possible to know the approximate mortgage interest and brokerage fees I can expect when closing a mortgage with you in this market?
KM: The approximate mortgage interest and brokerage fees can vary depending on factors such as the loan amount, interest rate, closing costs, and other considerations. It’s advisable to request a Loan Estimate from the lender, which provides an itemized breakdown of the expected costs associated with the mortgage loan.
Q: If you have a good Canadian credit score (800+), can you use that to qualify for better mortgage rates in the U.S.?
KM: A good Canadian credit score could potentially be beneficial in qualifying for better mortgage rates in the U.S., as creditworthiness is a significant factor in determining interest rates. However, lenders may also consider other factors such as income, assets, and debt-to-income ratio in their evaluation process.
Q: Does an ITIN score get you better rates?
KM: An Individual Taxpayer Identification Number (ITIN) is used by individuals who are not eligible for a Social Security Number but have U.S. tax obligations. While having an ITIN may be necessary for tax purposes, its direct impact on mortgage rates may vary depending on other factors such as credit history, income, and assets.
