Looking for a U.S. Vacation Property? Get Financing in Canada First!

With the late arrival of winter so far in Ontario, we’ve been pretty lucky. But temperatures are starting to drop, and those snow fall measurements are already starting to take place in many of our cities. Naturally, this is the time many Canadians start thinking about investing in a second home, and it’s usually somewhere warm, and it’s usually in the United States. Who wouldn’t want to leave the sleet and the snow for just a few weeks of fun in the sun and days on the beach? But, before you start packing up your swimsuit and beach ball, you need to get financed – in Canada – first!
While Canada’s economy took a slight hit during the recession of 2008, it was nowhere near as bad as the hit on the States’ economy. Many major American banks are being hit with lawsuits for giving bad mortgages, while others are simply foreclosing on more and more houses every day, because homeowners can simply no longer afford them. Because of this, banks in the United States have become much more stringent on their lending practices, and not just for Americans – but for foreign investors too. Banks simply don’t want to lend any more money, even if you have a great credit score and the right down payment (which right now is about 50% for foreign investors). So, what are Canadians looking for a warmer escape supposed to do?
Simply get financing before you head south and find that dream property. With a home equity line of credit, Canadian homeowners can borrow up to 80% of the value of their home, minus the amount that they still need to pay on their mortgage. By taking out a home equity line of credit Canada first, then all the homeowner needs to do is go find their property and get the deal done.
When financing is approved here first, you’ll have the money in hand when it’s time to buy the new property. No new loans need to be obtained, and you certainly won’t need to speak to any U.S. banks or lenders. No verification of income needs to be done, and that ghastly down payment won’t be required either. Buying a new property can be complicated, especially when that property is in a different country. But it doesn’t have to be. Take care of it here first, and when the snow finally does start to stick around, you’ll be busy building sandcastles!