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Major Differences between Canadian and US Mortgages that Canadians Need to Be Aware Of

As a Canadian buying US real estate, you need to be aware of the major differences in Canadian mortgages and US mortgages.

US Mortgage Pricing.  The pricing of US Mortgage Rates is extremely different in Canada compared to the US. In Canada, it is quite normal to negotiate Canadian mortgage rates from your lender.  This haggling and negotiating process is normal and can help you obtain a discount from the posted mortgage rate in Canada.  However, in the U.S., the US mortgage market controls the ultimate rate you will receive.  Consider it much more free market than in Canada.  The US mortgage rate that is offered to you is the best ultimate mortgage rate you can receive on that day for the product you chose.  There is no amount of negotiating that can change this.

 

US Mortgage Closing Time Frame:  The time frame for closing on a US mortgage is materially different from that in Canada.  In Canada, if you have a hard working mortgage broker and lender, a property purchase and mortgage can be closed in 3 to 6 business days if everyone works hard and all the paperwork is in order.  However, in the U.S., the time frame is considerably longer and can take up to 3 to 5 weeks to process the US mortgage application.

 

US Mortgage Costs: The costs of a US mortgage are much different than that in Canada.  The main reason for this is because the US has a decentralized structure, which historically is the way the US operates the US mortgage market.  Appraisers are independent contractors and are not bank employees.