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10 Common Questions about Securing a Mortgage in the U.S. from RBC Bank

1. As a Canadian, how do I qualify for a Mortgage in the U.S.?

As the only national lender dedicated to Canadians purchasing real estate in the U.S., RBC Bank is a great source to assist you. We lend in all 50 states and are able to use your Canadian credit history to purchase real estate in the U.S. To qualify for a U.S. mortgage you will need to complete a standard application and provide certain documentation relating to your income, credit, liabilities and assets.  Once your application is submitted, it will take about 45 days to finalize. Our team of cross-border mortgage specialists are here to assist you throughout the process. Learn more about securing a mortgage in the U.S.

2. In what US states does RBC Bank offer Mortgages?

All 50 States.

3. What Interest Rates are available?

Interest rates are tied to the market therefore they can fluctuate daily until you lock your rate.  Our cross-border mortgage specialists will work with you to determine which rates for which you qualify.

4. What Loan Terms are available?

RBC Bank offers 3-, 5- and 7-year Adjustable Rate Mortgage (ARM) loans amortized over 30 years.*  These loans are fixed for the specified term then adjust yearly (up or down) based on the market.

5. What is the required down payment?

Your down payment amount depends on a number of criteria including credit score, type of property and the state in which the property is located.  Typically, with healthy credit, you can expect a down payment of 20% for a Primary or Second home and between 40 - 50% for investment property.

6. How do I get Pre-Qualified?

Before you start looking for your home in the U.S., determine how much you can comfortably afford with an RBC Bank Pre-Qualification.  Just complete a phone application with one of our cross-border mortgage specialists and provide us with some income documentation and information on your assets.  We'll pull your credit report and provide you a Pre-Qualification Certificate so you can get shopping! Please note, a Pre-Qualification is not a loan decision.  We will still underwrite your file once you have a property to finalize the loan.

7. What is the Application Process?

The first step is to receive your Pre-Qualification so you can begin shopping for a property in the U.S.  You’ll then want to start gathering the documentation required to apply for a mortgage loan.  Click here to review our Mortgage Documentation Checklist.  Once you have a signed Purchase Contract for the property you plan on purchasing, forward us a copy along with all requested documentation.  We will then order the required third-party services such as an Appraisal, Title Work, and Flood Determination. These documents will be added to your application and package of documents to help underwrite your loan. Once approved, we will work with the Title Company or selected Real Estate Attorney to put together a closing package for your signature.  Please note, if you will be closing outside of the United States for a home purchased in the U.S., we will need more time to complete the process.  Be sure to let us know early in the process if you will be closing outside of the U.S.

8. How long does it take to go through the Application process?

It typically takes 45 days to purchase or refinance a home in the United States.  This is largely due to third party documentation requirements such as Appraisals, Title Work and Flood Determination.  Complex transactions, such as a self-employed buyer, may take up to 60 days.  We recommend you allow at least 45 days in your purchase contract from the contract date to the closing date.  You can help ensure the process moves as quickly as possible by providing us all of the requested documentation at the time you submit your application.

9. What documentation is required to apply for a mortgage?

The mortgage industry in the U.S. is highly regulated.  Therefore, there is more documentation required here compared to Canada.  The list below is the general documentation required. Of course, each borrower’s situation is unique so we may require more or less documentation.

Income

  • Most recent 30 days of paystubs (paystubs must be consecutive).
  • Last 2 years of T-4's / W-2's.
  • Last 2 years of Canadian T-1 General tax forms including all schedules. Notice of Assessments are not sufficient, we must have a full Tax Return.
  • Last 2 years of American Tax Form 1040 (if applicable).
  • Last 2 years of Canadian Business Tax Form T-2 (if applicable).

Assets

  • Last 2 months of bank statements for each account. It is preferable that the regular monthly statement be provided as internet screen prints often do not contain required information.  Quarterly statements are acceptable in lieu of monthly statements.  Any internet printouts must include your name, bank name, account number, balance, and 60 day history. All pages must be provided even if a page is blank.
  • Mortgage statement and tax and insurance statements for all properties owned in Canada or abroad.  If taxes and insurance are escrowed and clearly shown on mortgage statement, we won’t need individual tax/insurance statements.

Identification

  • Copy of your passport, work visa, Canadian or U.S. driver’s license.
  • Copy or your SIN card or Social Security Card.

10. What types of properties does RBC Bank finance?

We finance primary and secondary homes as well as certain investment properties.  However, we do not offer commercial financing or financing for multi-unit complexes greater than 4 units.  We also do not finance vacant land, manufactured homes (mobile homes), working farms or Condotels (condos that rent rooms on short term leases or are located in hotels).  We also currently do not offer Home Lines or Home Equity Lines of Credit.

†All loans are subject to approval, including verification of acceptable income, creditworthiness, and property valuations. Minimum and maximum property values and maximum loan-to-value ratios apply.  Homeowner’s insurance is required for all loans and flood insurance is required if property is located in a Special Flood Hazard Area. Escrows may be required.  There are closing costs associated with these products.

* Interest rates and payments may increase after consummation. After the initial fixed-rate period, your interest rate can increase or decrease annually according to the market index.

Example: 3-Year ARM calculation assumes a $250,000 loan amount, 2.375% interest rate, 2.463% APR, with 25% down payment, amortized over 360 months = $971.64 monthly payment.  If the down payment is less than 20%, mortgage insurance may be needed on the loan.  This could increase the monthly payment and the interest rate. Rates subject to increase after consummation.

Example: 5-Year ARM calculation assumes a $250,000 loan amount, 2.750% interest rate, 2.840% APR, with 25% down payment, amortized over 360 months = $1,020.61 monthly payment.  If the down payment is less than 20%, mortgage insurance may be needed on the loan.  This could increase the monthly payment and the interest rate. Rates subject to increase after consummation.

Example: 7-Year ARM calculation assumes a $250,000 loan amount, 3.375% interest rate, 3.468 APR, with 25% down payment, amortized over 360 months = $1,105.25 monthly payment.  If the down payment is less than 20%, mortgage insurance may be needed on the loan.  This could increase the monthly payment and the interest rate. Rates subject to increase after consummation.