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Q: u.s. citizen buying property in canada ( Answered 4 out of 5 stars,   0 Comments )
Subject: u.s. citizen buying property in canada
Category: Business and Money > Finance
Asked by: 5657matte-ga
List Price: $25.00
Posted: 31 Aug 2006 14:21 PDT
Expires: 30 Sep 2006 14:21 PDT
Question ID: 761211
I'm a u.s. citizen who wants to buy land in nova scotia, I want to
borrow the money for this purchase. So far all u.s. lenders have said
no, not because of my credit which is excellent, but because canada is
a foreign country. Is there any other way to make this work?
Subject: Re: u.s. citizen buying property in canada
Answered By: hummer-ga on 31 Aug 2006 19:36 PDT
Rated:4 out of 5 stars
Hi 5657matte,

Ah, Nova Scotia, one of my favorite spots too.  Yes, it's not possible
to take out a mortgage on foreign property, but you can take out a
mortgage of up to 65% of the purchase price at a Canadian institution.
I've copied and pasted some relevant sections below, but please click
on the links for full details.

Buying Property in Canada
"The bottom line is that buying real estate in Canada is very easy.
From a residency point of view, if you plan to stay in Canada for 6
months or less each year, the government considers you a non-resident,
which means that you can still open a bank account and buy property,
etc. If you plan to live in Canada for more than 6 months per year,
you must apply for immigrant status.
It is important to note, however, that while the majority of Provinces
(British Columbia, Ontario, Quebec, Nova Scotia, Newfoundland, New
Brunswick) have no restrictions on foreign ownership of real estate in
"As a Canadian resident, financing is typically available at 75% of
the purchase price for a primary residence over a 25-year term. For a
non-resident, the ratio is generally 65% mortgage and 35% as a down
payment. Qualifying for the mortgage financing is probably the same as
in other countries - interviews via phone, fax, e-mail to gather
personal information which includes assets/liabilities, employment
and/or income information. Each borrower's application will be
considered on a case-by-case basis. Your realtor will be able to
advise you on suitable mortgage brokers.
The mortgage approval may take approximately 24-48 hours after
application and documentation has been submitted to the lender. The
documentation generally required is income verification, tax returns,
credit bureau or bank's report (letter from borrower's own bank
stating that all accounts are in good standing to date), down payment
confirmation via bank statements, copy of 2 pieces of ID and real
estate appraisal. Foreign banks cannot register mortgages in Canada,
so any mortgage would have to be raised via a Canadian mortgage
broker. (Please see 'Transferring Funds' for more information).
The borrower will require the services of a Canadian lawyer or notary
public to prepare the mortgage documents and registration at the Land
Titles office. Documents can be couriered outside Canada for signing -
this will need to be arranged with the lawyer and lender well in
advance of the completion date."
[see Additional Costs and Fees when Buying and Selling Property]

For those purchasers who are not residents of Canada the following
information may be useful:
"Generally, Banks outside Canada are unable to lend money on Canadian
properties. If you want to finance your purchase in your home country,
you will have to use assets other than the Canadian property. For this
reason, most purchasers use the Canadian Financial Institutions to
finance up to 65% of the purchase price. The option is open to the
non-resident to borrow at home for the remaining 35%. "

"But don't worry; you can overcome most problems once you have found
the house, cabin, cabana, or chalet of your dreams with persistence,
patience, and the right mortgage lender. You do have to make sure,
however, that you find real estate agents and lenders familiar with
the rules about non-residents buying property in their countries.
While this is fairly easy to do in Mexico and Canada, ... You might
check with the U.S. embassy in the country where you want to buy."
Another aspect of buying in a foreign country that shocks many
Americans is the size of the required down payment. To buy a house in
Canada, Miller says, " A 25 percent down payment is standard. It is
possible to get into a house with only a 20 percent down payment, but
the interest rates will be higher." Aside from that, Canadian
requirements are generally similar to the U.S. and the entire
transaction can be done in English."

"Generally, mortgages are available to non-residents of Canada up to a
maximum of 65% of the purchase price of a piece of property. Higher
amounts may be obtained if the residence is purchased with a Canadian
citizen. For residents, loan-to-value ratio is 75% (as below). There
is a minimum loan amount of approximately $57,000. Fixed and variable
rate loans available, from 4%. Loans are available in Canadian dollars
Max LTV%: 75%
Term: Up to 25 years
Lender: HSBC Bank Canada:

HSBC Branch
Nearest Landmark:
Law Courts
Nearest Intersection:
Duke and Hollis Street
1801 Hollis Street  Halifax,  Nova Scotia  B3J 3N4 
[see map],cmd_LocateBranch=|BranchArea=quebec&accept-language=en-CA

Scotia Bank Mortgage Centre,1608,CID8216_LIDen,00.html

Scotia Bank - Halifax branches

What do I need to know about buying property in Nova Scotia?

Canada - Financial Sector links

New Mortgages For Non-Canadian Residents
"We often negotiate superb mortgage loans on behalf of non-Canadian
residents. Many of our national Canadian lenders will provide an
approval on residential real estate with mortgage financing up to 65%
loan-to-value, i.e. min. 35% down payment or equivalent equity
(subject to applicant's net worth, cash-flow ability and credit
repayment history). All of the preferred mortgage terms and options
are available at very competitive interest rates."
"Most Canadian purchases are financed through Canadian institutional
mortgage lenders. Lenders usually request that you service your new
mortgage from a branch account within their organization.
"In many cases, Canadian credit agencies are not able to provide
personal credit information on Non-Canadian citizens. It may be
necessary to obtain such confirmation of credit worthiness from your
local banking institution. Verification of income and down payment
resources are also required."

I hope this helps to get you off to a good start. If you have any
questions, please post a clarification request and wait for me to
respond before closing/rating my answer.

Thank you,

Google Search Terms Used: nova scotia canada mortgage nonresidents
5657matte-ga rated this answer:4 out of 5 stars

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