Making the Most of Your Money: Bank Smarter in the U.S.
It’s not uncommon for our clients to tell us they are sometimes unsure how to make the most of their money in the U.S. given the differences with Canada.
So how can you feel confident that you’re making smart financial decisions while in the States – maximizing your money and saving on fees, for example? Just talk to us. Whether buying a vacation property in the U.S. or maximizing your U.S. Dollars, RBC Bank has cross-border specialists dedicated to providing Canadians the expert advice you can rely on.
U.S. Home Financing: Understanding Your Options
With today’s low interest rates and wide selection of properties available at competitive prices, there has never been a better time to make a real estate purchase in the U.S. So what’s the best way to finance your home in the States? There are three popular options that most buyers consider – getting a U.S. mortgage, utilizing the equity in their Canadian home, or paying cash. You could realize significant gains by taking a deeper look into each before you buy.
- U.S. Mortgage
Getting a U.S. mortgage can be simpler than you might expect and comes with its own advantages including no prepayment penalties and the opportunity to build credit in the U.S. RBC Bank specializes in mortgage lending for Canadians, and you’ll never pay a foreign national rate with us. Plus, RBC Bank will use your Canadian credit history and your RBC Royal Bank history to help secure your U.S. financing. We can also provide you with a mortgage pre-qualification so you can shop for a home knowing what your monthly payments will be.
- Equity In your Canadian Home
Oftentimes buyers consider tapping into the equity of their Canadian home with an RBC Homeline Plan® or Home Equity Line of Credit to finance property in the U.S. However, maxing out a Homeline Plan means that those funds aren’t available for other uses like home improvements. In addition, it can be costly because that money has to be converted to U.S. Dollars and the costs of exchanging large sums of money today can add up quickly. As you consider this option you’ll have to determine the cost of exchange rates as well as the interest you will pay on the money you borrow.
- Paying Cash
Paying cash for a U.S. property alleviates the need for a monthly mortgage payment, but from a financial-planning standpoint there can be drawbacks to paying with cash. Should you need money quickly, you can only get the cash back out of your home by selling it or borrowing against the property – both of which take time. You should also consider what kind of return you are or could be earning on your cash versus using it to purchase a home. And as with a Homeline Plan, your Canadian Dollars must be exchanged for U.S. Dollars when purchasing a home in the U.S. Exchange rates applied to cash transactions may include shipping and handling charges, making the exchange rate for cash less favorable than financing options you have available.
Money Market Accounts: Secure Savings with Added Value
Another wise way to make the most of your money is place it in a money market account. A money market account in Canada is a money market mutual fund that may involve investing in short-term mutual funds. In contrast, a U.S. money market account is a type of savings account that usually pays a higher interest rate compared to a regular savings account.
Best of all, money market accounts generally offer tiered interest rates so as your balance increases, so does your interest rate! The account allows for up to six transfers or withdrawals per month via phone, online or pre-authorized transfer or debit card and funds are insured by the FDIC, up to $250,000 per depositor so you know that your money is safe and secure. A money market account from RBC Bank comes with free Online Banking and instant Cross-Border Funds Transfers, making it so easy to access your money when and where you need it.
Take advantage of this great offer before time runs out.
Call 1-800-ROYAL® 5-3 (1-800-769-2553) to speak with a Cross-Border Banking Specialist today.
All loans and lines subject to credit approval.