What you need to know before buying a home in the U.S.

If you’re a Canadian looking to buy a U.S. property, whether as a vacation home or as an investment, it’s important to understand that the U.S. real estate market is different from Canada’s.

What are my financing options? Are U.S. mortgage rules and regulations There are a couple of options you can different by state? Why choose RBC ? consider to finance a property in the U.S. While the majority of rules and n RBC Bank is currently the only regulations are the same across the U.S., national mortgage provider dedicated n  U.S. mortgage. You can apply for a there may be some differences by state. to helping Canadians purchase mortgage with a U.S. bank, such as Some states have their own income tax property in all 50 states. RBC Bank1 , the U.S. subsidiary of codes and mortgage rules. Also, some n RBC Bank will use your Canadian RBC Royal Bank®. RBC Bank offers states charge extra non-resident taxes. credit history and RBC Royal Bank mortgages in all 50 states and will use history to help you secure financing.3 your Canadian credit history and your What is the required down payment for a n RBC Bank’s dedicated team of cross- RBC Royal Bank history to help you U.S. mortgage? border mortgage specialists will secure U.S. financing. Your down payment amount depends on a provide expert advice as they guide number of criteria, including credit score, n  Equity in your Canadian home. you step-by-step through the U.S. type of property and the state in which An RBC Homeline Plan® lets you mortgage process. the property is located. Typically, you access up to 80% of the value of your n RBC Bank does not charge a Foreign can expect a down payment of 20% for a Canadian home2, but you will have to National Premium. primary or second home and between pay foreign exchange rates to convert 40% and 50% for an investment property. your Canadian dollars to U.S. dollars. Before you start looking for your property in the U.S., visit our online calculators or apply for a pre-approval from RBC Bank and see how much you can comfortably afford. For more information, visit rbcbank.com. How do I obtain a mortgage with RBC Bank? Will I be subject to U.S. taxes? To qualify for a U.S. mortgage, you will need to complete a There are three major tax implications you need to consider standard application and provide certain documentation when buying real estate in the U.S.: relating to your income, credit, liabilities and assets. Once n Rental income: If you rent out your vacation home in the your application and all the requested documentation are U.S., you may be required to pay U.S. tax on the rental submitted, it will take about 45 days to finalize. Our dedicated income. You may also be required to report the rental team of cross-border mortgage specialists will assist you income on your Canadian tax return. through the process. n C apital gains tax: If you sell U.S. real estate, you may be What loan terms does RBC Bank offer? subject to a capital gains tax in Canada. You may also have RBC Bank offers Adjustable Rate Mortgage (ARM) loans. The to file a U.S. tax return to report the capital gain. interest rates are fixed for a specified term and then adjust yearly based on the market. There is no pre-payment penalty n Estate taxes: If you pass away holding U.S. property and and RBC Bank does not charge a Foreign National Premium fee your worldwide estate exceeds a certain dollar amount, like many U.S. lenders. the executor of your estate may have to file a U.S. estate tax return. What types of home insurance do I need? n H omeowner (hazard) insurance: Evidence of an U.S. rules and regulations for taxes are different than in appropriate level of insurance coverage is required annually Canadian tax rules. It is important that you speak with in the U.S. You may also have to pay a higher premium rate professional advisors for specific advice related to taxes in Gulf Coast states, including popular states like and estate planning. and Texas. n Flood insurance: U.S. homeowners insurance typically doesn’t cover damages caused by flooding. U.S. law requires you to have flood insurance if you live in an officially recognized high-risk area, and evidence of coverage is required annually.

For more information on U.S. mortgages, visit rbcbank.com.

®/ ™ Trademark(s) of . RBC and Royal Bank are registered trademarks of Royal Bank of Canada. RBC Bank, Equal Housing Lender 1 RBC Bank is RBC Bank (Georgia), National Association (“RBC Bank”), a wholly owned U.S. banking subsidiary of Royal Bank of Canada. 2 All residential mortgage products are offered by Royal Bank of Canada and are subject to its standard lending criteria for residential mortgages. Access up to 80% of the lesser of the purchase price and the appraised value of your home. 3 Mortgages and Home Equity Lines of Credit (HELOCs) are subject to approval, including verification of acceptable income, credit worthiness and property valuations. Minimum and maximum property values and maximum loan-to-value ratios apply. Homeowner’s insurance is required for all loans and lines of credit, and flood insurance is required if the property is located in a Special Flood Hazard area. Escrows may be required on mortgages. There are closing costs associated with mortgage products. In addition to the costs listed above, third party closing costs for Home Equity Lines of Credit may range from $900 to $9,000. Home Equity Lines of Credit are not offered for properties in Texas. Home Equity Lines of Credit are not available for investment properties.

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