with the USD trading at a premium to the CAD, is it really worth buying in the states, even with historically low prices?
Financing a US Property Purchase this month
Hello everyone from Atlantic Canada,
I am purchasing a vacation home/investment property in Florida,
with closing set for April 23rd. I have been researching financing alternatives available and would appreciate any feedback, advice and comments you may be able to provide.
With closing costs the price will be around $200,000 US.
with an exchange rate of 1.30 that brings it to $255,000 Canadian.
I can finance it with my Canadian HELOC at prime (2.5%) and I have a 10 yr fixed rate pre-approved at 5.25% for the next 4 months, then if I don't want to lock in I will apply for another preapproval for 4 months etc.
I was interested in trying to reduce the impact of the US exchange on the purchase and applied for a US Mortgage in Florida - awaiting rates but likely 5.5 or more on a 5 yr . I also enquired about a US HELOC - I was offerred P+1.5 over the phone but was told there is a 4% floor. An option may be to finance a portion in CDA and portion US.
There will be a BOC rate announcement next on Apr 21st. Many speculate rates will be cut a bit further. Who knows what will happen to the exchange rates - there are so many variables involved. And our economy is so tightly linked to the US that as they suffer further in the recession - even though we may not suffer as much - we will be on the same trend.
So, what do you think?
And thanks in advance for taking the time to read my "story".
I am purchasing a vacation home/investment property in Florida,
with closing set for April 23rd. I have been researching financing alternatives available and would appreciate any feedback, advice and comments you may be able to provide.With closing costs the price will be around $200,000 US.
with an exchange rate of 1.30 that brings it to $255,000 Canadian.
I can finance it with my Canadian HELOC at prime (2.5%) and I have a 10 yr fixed rate pre-approved at 5.25% for the next 4 months, then if I don't want to lock in I will apply for another preapproval for 4 months etc.
I was interested in trying to reduce the impact of the US exchange on the purchase and applied for a US Mortgage in Florida - awaiting rates but likely 5.5 or more on a 5 yr . I also enquired about a US HELOC - I was offerred P+1.5 over the phone but was told there is a 4% floor. An option may be to finance a portion in CDA and portion US.
There will be a BOC rate announcement next on Apr 21st. Many speculate rates will be cut a bit further. Who knows what will happen to the exchange rates - there are so many variables involved. And our economy is so tightly linked to the US that as they suffer further in the recession - even though we may not suffer as much - we will be on the same trend.
So, what do you think?
And thanks in advance for taking the time to read my "story".
