Top 10 U.S. mortgage questions1
As a Canadian, financing property in the U.S. can be challenging compared to what you have experienced in Canada given the vast differences. At RBC Bank, we have a dedicated Cross-Border Mortgage Team who serve as your trusted advisors and guide you through the process at every step of the way.
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 has the experience and know-how to assist you. And we’re able to use your Canadian credit history and your relationship with RBC Royal Bank™ to help you secure financing. To qualify, you will complete a standard application and provide documentation about your income, credit, liabilities, and assets. Once your application and all of the required documentation are submitted, loan processing typically takes around 45 days.
2. In what U.S. states does RBC Bank offer mortgages?
We offer real estate financing in all 50 states.
3. What interest rates are available?
Interest rates are tied to the market, and they fluctuate daily until you lock your rate. Our Cross-Border Mortgage Team works with you to determine your best rate. For today's rates, click here.
4. What loan terms are available?*
RBC Bank offers 3-year, 5-year, and 7-year adjustable rate mortgages (ARMs) amortized over 30 years.2 These loans are fixed for the specified term, then adjust yearly (up or down) based on the market.
5. What types of properties does RBC Bank finance?
We finance primary and secondary homes and certain investment properties (for existing RBC Royal Bank clients). However, we do not offer commercial financing or financing for multi-unit complexes greater than four units. We also do not finance vacant land (lot loans), manufactured homes (mobile homes), working farms, or condotels (condos that rent rooms on short-term leases or are located in hotels).
6. What is the required down payment?
Your down payment amount depends on various criteria, including credit score, type of property, and the state of where the property is located. Typically, with healthy credit, you can expect a down payment of 20% for a primary or second home and from 40-50% for investment property.
7. How do I get pre-qualified?
In the U.S., your U.S. real estate agent may want to make sure you're pre-qualified for financing. This brief process will tell you how much you may be qualified to borrow. It is important to start the pre-qualification process only if you are within 60 days of purchase. Pre-qualifications require a credit inquiry and are only valid for 60 days.
To pre-qualify, apply online or speak with a member of the RBC Bank Cross-Border Mortgage Team at 1-866-283-5928 to provide basic information about your income, assets, and credit. We'll review your credit report and provide you with a Conditional Approval Letter so that you can start shopping for that perfect home. Note that a pre-qualification is not a final loan decision.
8. What is the application process?
The first step is to pre-qualify so you can begin shopping for a property in the U.S. You’ll then want to start gathering the documentation required for your mortgage application. For an idea of what types of documentation are typically required, click here to review our Mortgage Documentation Checklist.
Once you have a signed purchase contract, you’ll forward a copy to us, along with all requested documentation. We’ll then order the required third-party services, such as an appraisal, title search, and flood certification. These documents will be added to your application file. If you are approved, we will work with the title company or a real estate attorney to put together the loan documents for your signature.
9. 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 certification. Complex cases, such as a self-employed buyer or if your property is located in a state with extended appraisal scheduling timelines, may take 60 or more days. You can help ensure the process moves as quickly as possible by providing all of the requested documentation at the time you submit your application.
10. What documentation is required to apply for a mortgage?
The mortgage industry in the U.S. is highly regulated. Typically, we’ll require:
- Copy of your passport and/or work visa
- Copy of your SIN card or a U.S. Social Security card
- Most recent 30 days of consecutive pay stubs
- Past 2 years of T4s / W2s
- Past 2 years of Canadian T1 tax forms including all schedules. Notices of assessments are not sufficient. We must have a full tax return.
- Past 2 years of U.S. IRS form 1040 (if applicable)
- Past 2 years of Canadian Business Tax Form T-2 (if applicable)
- Past 2 months of bank statements for each account you hold. Quarterly statements are acceptable in lieu of monthly statements. Any computer printouts must include your name, bank name, account number, balance, and a 60-day history. All pages must be provided, even if a page is blank.
- Your mortgage statement and tax and insurance statements for all properties owned in Canada or abroad. If taxes and insurance are escrowed and are clearly shown on the mortgage statement, we won’t need individual tax/insurance statements.
For a convenient Mortgage Documentation Checklist, click here.
1 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.
2 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.