Financing Options for Canadian Borrowers

If you are a Canadian interested in investing in Hawaii or California real estate, and will require financing, here are a few tips to help you get prepared:

Minimum down and Maximum Loan Amounts

Single family residences and conforming (non-vacation rental) condos:

Minimum 20% down up to $679,650 loan amount
Minimum 30% down up to $1,500,000 loan amount
Minimum 35% down up to $2,000,000 loan amount
Minimum 40% down up to $5,000,000 loan amount

Minimum down and Maximum Loans Amount

All property types, including condotels:

Minimum 30% down up to $1,500,000 loan amount
Minimum 35% down up to $2,000,000 loan amount
Minimum 40% down up to $5,000,000 loan amount

Typical Program Types

The most popular loan programs in the U.S. are 30-year and 15-year fixed rate mortgages. Fixed rate mortgages are now available for Canadian borrowers. However, the most popular loan program for our Canadian borrowers is the 10-year ARM.

U.S. ARM loan programs are similar to Canadian variable rate loans. However, a U.S. mortgage is amortized over 30 years and does not have a prepayment penalty. U.S. ARM loan programs offer an initial fixed rate of 1, 3, 5, 7, or 10 years. Once the loan matures past the initial fixed rate period, the rate will adjust one time every year for the remaining loan term.

Income Documentation

U.S. mortgages now require full income documentation for at least 2 years. This requires T-1s, T-4s and Corp/Business returns and current pay stubs if applicable.

One program is available that will allow asset depletion to assist with income qualification and is a good option for those with strong assets and the recently retired or self-employed.

Asset Documentation

Full liquid asset documentation is required. This usually consists of 2-3 months of bank, stock, mutual fund and/or retirement statements.

Closing Costs

Closing costs in the United States are different than those in Canada. Common / standard fees from U.S. banks and lenders include:

• Underwriting
• Loan Docs
• Administrative
• Processing
• Funding

Some or all of these fees may be applicable to your prospective loan and will be disclosed with our initial Lender’s Estimate.