First Things First: The Four Things That Decide Your US Mortgage

If you are Canadian and thinking about buying in the United States, you will find a great deal written about rates and almost nothing about what actually decides your file.

Four things decide it. Rate is not one of them.

1. Which country your money comes from

This is the whole problem in one sentence. A U.S. mortgage lender is built to read a U.S. borrower: a Social Security Number, a U.S. credit score, W-2 income, U.S.-filed tax returns. You arrive with none of that and a perfectly strong financial position.

A domestic U.S. lender may decline you even when you are not a poor risk, simply because its standard program and systems are not built to read your Canadian information. The staff at a local Florida bank branch are not being difficult; the product they sell may genuinely not accommodate you.

The programs that do accommodate you are a different category, and knowing they exist is most of the battle. They accept a Canadian credit report, Canadian income documents, a passport, and Canadian bank statements.

2. What kind of buyer you are

The same house gets a different mortgage depending on why you are buying it.

A winter home you will use. Second home or foreign national programs. Typically 20 to 30 percent down. This is the snowbird file.

A rental you will not live in. A DSCR loan generally qualifies on the property's rental income rather than your personal income, often without relying on your personal tax returns. Usually 25 to 30 percent down.

A home you are relocating into. If you will hold a U.S. visa and U.S. employment, more options open, but there is a transition window where you have left Canadian income and not yet established U.S. income. That window needs planning.

People routinely collect documents for the wrong one of these for months. Decide it first.

3. How you prove income, not how much you earn

This is the one that surprises Canadians most, and it is where the most files die.

If you are an employee with T4 income, this is straightforward. If you own a corporation and, like most Canadian business owners, you minimise personal taxable income for perfectly good tax reasons, your Canadian tax return understates what you actually earn. A U.S. underwriter reading that return sees a modest income and a large mortgage request.

That is not a decline for affordability. It is a decline for documentation, and it has a different fix: programs that read bank statements, or corporate financials, or the property's own income, instead of your personal return.

The distinction matters because the two failures feel identical from the outside and have completely different solutions. If you have been told no, it is worth knowing which of the two happened to you.

4. Timing

Almost everything useful has lead time. A U.S. credit file needs roughly six months of reported history before a score exists. An ITIN takes time. Down payment funds need to sit still and be traceable. Two years of consistent documentation cannot be created in a month.

The buyers with easy closings are not the wealthy ones. They are the ones who started the paperwork before they started house hunting.

What this is not about

It is not about the rate. A rate you cannot qualify for is not a rate. Get the structure right and then negotiate the price of it.

It is not about paying cash to avoid the problem. Paying cash is a legitimate choice, but many Canadians do it because they concluded financing was impossible, not because they compared. Liquidating registered accounts to buy a house triggers Canadian tax on the withdrawal and converts the entire amount at one exchange rate on one day. Sometimes cash still wins. It should be a decision, not a default.

It is not about being declined. A decline from a domestic U.S. lender tells you almost nothing about whether your purchase is financeable. It usually tells you that you asked a lender that does not make this kind of loan.

Where to start

Answer these four before you talk to anyone about rates: where your income and credit live, what kind of buyer you are, how your income can be documented, and how long you have.

If you can answer them, a competent broker can tell you in one conversation which programs fit and roughly what they cost. If you cannot, no amount of rate shopping will help, because you do not yet know which product you are shopping for.

David Nataf is personally licensed in Florida (NMLS #2613311) and Quebec (AMF #3001986744). U.S. files are placed through Orbis Mortgage, NMLS #2583431. For a purchase in a state where he is not personally licensed, he runs the Canadian side of the file, the cross-border structuring and the lender matching, coordinated with an originator licensed in that state.

This page is for information. Program terms, rates and requirements vary by lender and change without notice. Nothing here is tax or immigration advice.