Bethany Real Estate and Investments Buy Home in USA

Foreign National Loan

Although obtaining financing in the United States today is more difficult than during the property boom, it is still possible for qualified foreign investors to get a loan from several Banks when buying a property in United States. However, the loan is typically 50-60% of the purchase price or less. In other words, the down payment must be 40-50% or more of the purchase price.

Qualification is not based on the FICO credit score and is relatively easy. Foreigners are not required to have a credit record in the United States. Of course, the borrowers must have a job or be self employed in their home country.

The interest rate charged may be slightly more than for a US resident. Some Banks offer an ARM (Adjustable Rate Mortgage) loan or others have a 30 year fixed interest rate loan. The ARM loans may have an interest rate fixed for 3 to 5 years, after which the interest rate will be based on an index plus margin, they are amortized over 30 years.

Here are the basic steps to obtain a home loan in the United States :

a. Fill in an application form (1003) and signing of various disclosures required by the Bank/Government.

Section I : Mortgage applied for is typically conventional.
The amount is usually 60-65% of the purchase price
Signature(s) only if joint loan application.
Section II: Property address, purpose of loan is purchase
Title will be held in borrowers names. Manner of holding title can be joint-tenancy, community property, etc
Section III: Borrower/Co-Borrower Info
Section IV: Borrower/Co-Borrower Employment Information
Section V: Income Information
Section VI: Asset and Liabilities
Section VII: Transaction Detail (Purchase Price, Down Payment, etc)
Section VIII: Declaration (most of the checkboxes should be checked No)
Section IX: Signature(s)
Section X: Optional
Continuation Sheet: Signature(s)

b. Verification of Income
  Income is usually verified through a letter of employment from employer (even if self employed).

c. Verification of Assets
  Assets are usually verified through bank statements. Many lenders will require proof of down payment and a reserve which may be in the order of 12 months of PITI (Principal, Interest, Taxes and Insurance) payments.

d. Verification of Identity
  Identity is usually verified through a copy of the borrower’s passport, US visa, and a business card.

e. Credit References
  Sometimes, the Lender will require a credit reference from a local credit card or insurance company. Alternatively, in some countries, the Lender may require an International Credit Report.

f. Purchase Contract
  Copy of the ratified contract is required.

g. Open a checking account in USA
  Usually borrower will be required to open a checking account in USA. Typically at the Lender Bank.
Many people would then have an auto-debit set up to pay for the mortgage.

h. Signing of loan documents at escrow office and subsequent funding of the loan.
  Alternatively, borrower can sign a power of attorney which is approved by the Lender and escrow company. The attorney-in-fact can then sign on behalf of borrower at the escrow office.

This whole process will take approximately 30-45 days from the day when the application is submitted.

Please contact us for further information.