Financing for Canadian investors?

[Chris Grebeldinger]

Do any Canadian investors have advice about financing options for a first time (in US) Canadian buyer? I do my local banking with RBC and I've been pre-approved by them for a 7/1 ARM 30 year @ 5.125% . Is this a good option?

[Oren K.]

@Chris Grebeldinger,

As a Canadian you do not get an SSN. When you file your first US tax return, you will be issued an Individual Tax Identifier Number (ITIN). Unfortunately, the US credit rating companies (e.g. Transunion, Equifax) do not provide a credit score for people with an ITIN. You can have credit cards, residence, phone lines, etc. for years with no lates or defaults but still no credit score.

Unfortunately @Mike Lambert is correct that while there are Canadian banks that do provide loans for US investing, they come with significant limitations. Similarly, US lenders are very restrictive even if they are willing to consider lending to Canadians since they  are Non-Resident Foreign Nationals. Basically, they don't want to take the risk that if things don't go as planned, having to chase you across the border.

Smaller more local banks may be more flexible if you are buying 'small' properties but if you are looking for a mid-sized (250K - 2M) commercial loan - it can be extremely difficult.

Good luck - Oren