Start With Your Canadian Bank's U.S. Counterpart

If you are Canadian and buying property in the United States, one of the first places I recommend checking is your existing bank's U.S. or cross-border division.

That is especially true if you already bank with institutions such as RBC, TD, BMO, National Bank or Desjardins.

When their U.S. programs fit the transaction, they can be very good solutions.

They already understand Canadian clients. Depending on the institution and program, they may be able to work with Canadian credit, Canadian income, Canadian assets and documentation that would be unfamiliar to a typical U.S. lender. RBC Bank says it uses your Canadian credit history and considers assets and liabilities on both sides of the border; BMO says you can apply for a U.S. mortgage using your Canadian credit history if you do not have a U.S. one.

If you have an established banking relationship, it makes sense to explore that route first.

There is no reason to make a mortgage more complicated than it needs to be.

What if the bank declines the file?

That is where the analysis becomes more important.

A decline does not necessarily mean the borrower is weak.

The issue might be:

• the property type;
• intended rental use;
• debt ratios;
• self-employed income;
• liquidity or reserve requirements;
• the proposed ownership structure;
• condo eligibility;
• documentation;
• or simply a lending policy specific to that bank.

It may also be something as simple as the transaction not fitting that particular cross-border program.

If the bank route works, excellent.

If it does not, that is when we are happy to step in.

We can review what happened, determine what actually caused the decline and look at other U.S. financing options, including institutional foreign-national programs, investment-property financing and other alternatives where appropriate. The common reasons are laid out in what to do if your cross-border bank program declines the mortgage, and what to do if someone then pushes you toward hard money is in I'm Canadian, I have no U.S. credit, and I'm being pushed into a hard money loan.

The objective is not to replace a good bank solution.

It is to make sure you still have a good financing strategy when that first option does not work. That strategy, program by program, is at declined for a U.S. mortgage: what actually works next.