New US Resident lending policy in Canada
March 21,2010
New US Resident lending policy in Canada
It now is going to be a lot easier for US residents to purchase in Canada. Effective immediately you are able to purchase with as little as 20% downpayment. There has also been changes to the Canada-US tax treaty(稅收協定)and this particular Bank will no longer gross up the interest rate for US Residents. Income, downpayment and credit history will have to be confirmed as usual and will be subject to the same debt servicing qualifications.
There used to be a tax treaty between the US and Canada. The Canadian Banks had to gross up the interest rate by either approx 1.48 or 1.74 and send a withholding tax down to the US IRS (Internal Revenue Service). The particular Bank that has this new program for US Residents is no longer doing that as the tax treaty is over. If other bank don't follow, US buyers will pay higher interest unless they sign a letter saying that it would be used for personal use and then there would be no increase. Some convention banks usually ask for at least 35% downpayment.
Therefore, if you have US friends or relatives wanting to buy properties in Canada. They should consider talking to mortgage broker for further assistant.
Click here to listten to the Cantonese interview in Podcast version
