US Mortgages for Non Residents: Loan Requirements

us mortgage for non residents

Can a Non US Resident get a Mortgage?

Yes, you can! America Mortgages has several mortgage programs for non U.S. Citizens to obtain US real estate for purchase or refinancing, regardless whether they have U.S. credit (FICO score), residency, or even proof of income.

Whether you plan on living in the home or staying in your home country and renting it out at today’s high rental rates, you too can invest in a US property. From Florida to Texas to California, you can buy a home in any one of the 50 United States!

Loan to Value (LTV) Ratio on US Mortgage for Non Residents

Maximum Loan to Value for a non-U.S. citizen mortgage is typically capped at 70% LTV (30 down payment) on a purchase and 65%LTV on a refinance.

Most programs allow up to USD$2,000,000 maximum cash out for a refinance or remortgage.

Non-US Citizen Mortgage Income Qualification

America Mortgages mortgages for US non-residents can be divide into two types of loan programs for:

  1. Stated Income Mortgages: Do not require income verification or tax returns. Perfect for non-U.S. citizen mortgage borrowers that are either self-employed or have numerous write-offs on foreign tax returns.
  2. Full Income Mortgages: Require the following:
  • Two (2) years of foreign tax returns
  • Two (2) months bank statements (foreign account okay)
  • One (1) month pay statements

Valid non-US Passport

US mortgages for non-residents require a copy of a valid passport of the borrower. A U.S. visa is not required normally. You should also make sure that your country is not listed in Office of Foreign Assets Control (OFAC) Sanctions Programs and Country Information.

Mortgage Loan Down Payment

The necessary down payment can range from 30% to 50%, depending on the property type, interest rate, and documents that you can provide. America Mortgages has mortgage programs for non-income and income verification.

Mortgage Interest Rate

U.S. Mortgage interest rates for non-US citizen borrowers vary from 5% to 7+% and are subject to change every day. America Mortgages compensation is not based on the rate, and borrowers will receive the best options available at the time of application.

Acceptible Non-US Resident Bank Statements

Non US Citizen mortgage borrowers need to show two months (60 days) of bank statements and show that funds are “seasoned.” Seasoned funds mean that funds have been in an account, U.S. or Foreign, for a minimum of 6o days for anti-money laundering (AML) purposes. U.S. anti-money laundering laws require this.

If the borrower has money in cash, he/she will need to deposit that cash in their bank and let it season two full months.

America Mortgages has loan programs that allow for 100% gift funds for Non-U.S. citizen borrowers looking to purchase U.S. Real Estate. Gift funds are money given to you by a family member or friend without expectation of repayment. This money will also need to meet the AML seasoning requirements.

Necessary Money Reserves US Mortgages for Non Residents

For most programs reserves are not required.

Foreign Credit Report or Bank Reference Letter

For most programs, a foreign credit report or bank reference letter will be required for non US citizens.

Required Funds in a U.S. Bank

The funds for the down payment and closing costs must be in a banking institution for 60 days (seasoned). These funds can be in either a U.S. account or non-U.S. account. Any bank statements in foreign languages require professional translation.

Minimum Loan Amount $100,000

Unlike regular loans, US mortgages for non citizens do have a minimum loan amount requirement. Remember that it is the loan amount, not the sales price.

If you have a specific scenario and property that you would like us to price it and give you the client’s requirements, please feel free to email hello@americamortgages.com.

Cash-Out Equity Release. Is now the time?

mortgage for overseas property

There’s something about having cash on hand that feels empowering. Being able to invest in projects, equities, crypto, or a business opens up endless possibilities. It could be to pay off high-interest debt or taking the family on a dream vacation before the children get too old. We hear this daily when speaking to clients that are considering cash-out refinancing.

What is a cash-out refinance?

A cash-out refinance is a mortgage refinancing option in which an old mortgage is replaced for a new one with a larger amount than owed on the previously existing loan, helping borrowers use their home mortgage to get some additional liquidity. You get the difference between the old mortgage and the new and the money can be used however you like. The amount received depends on the equity built up in your property.

How does it work?

Cash-out refinancing depends on several factors which include the value of the property, the amount owed, and how much you can qualify to borrow. Your America Mortgages loan officer can help you determine if this type of financing makes sense from a cost basis.

The potential benefits of a cash-out refinance

  • 1. A lower interest rate on your mortgage – Let’s say you bought your home when mortgage rates were much higher. Refinancing your home can improve your financial situation if you are able to obtain a lower rate.

  • 2. Debt consolidation – The money from a cash-out refinance can be used to pay off other high-interest debts, like credit cards and college loans. This could save you thousands in interest in the long run.

  • 3. Credit score improvement – Building on the previous point, paying your credit card debts off in full using a cash-out refinance can build your credit score by reducing your credit utilization ratio.

  • 4. Tax deductions – If you’re looking to improve your home using the cash from a cash-out refinance, you could potentially qualify for mortgage interest deduction.

  • 5. A cheaper way of paying for your kid’s education – It’s every parent’s dream to be able to put their kids through college, but high-interest student loans can be extremely stressful. Using a cash-out refinance can be a good alternative if the rates are lower.

  • 6. Inheritance – Although we advise you to speak with your attorney or tax advisor, it may be possible to reduce the amount of inheritance tax when estate planning with increased leverage.

  • 7. Take advantage of an opportunity – With the current situation with Covid, there are a lot of opportunities that may not be available once the world goes back to “normal”. Having access to liquidity and being able to act immediately can be potentially life-changing.

So, should you do it?

The truth is, cash-out refinancing can be a good way to improve your financial situation – we think of it as an affordable way to borrow money if you own substantial equity in your home. The money from a cash-out refinancing can even be used to rebuild equity that you’re taking out if you decide to use it on value-adding home renovations.

Interested in cash-out refinancing? America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. That is our sole focus and our expertise.

For more details please visit us at www.americamortgages.com

Did you know 26% of all home sales are newly built?!

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New construction homes have steadily taken a larger share of the pie over the past decade, but during the coronavirus pandemic, there has been a remarkable acceleration. According to Redfin Lead Economist Taylor Marr, there are two main reasons for this: a rise in home construction and fewer Americans listing their houses for sale.

“Homebuilding has become more attractive and profitable during the pandemic because of record-low mortgage rates and strong demand for homes,” Marr claims. “At the same time, many homeowners have chosen to stay and refinance or remodel their existing homes rather than sell them, which has led to new construction taking a larger share of the market.”

In the US, new residential construction projects have increased by 20% each month since the pandemic and reached the highest level since 2006, in March this year. This goes to show that homebuilders are becoming more optimistic and hopeful about the current housing situation, notwithstanding the shortage in lumber and rising costs of construction.

According to Melanie Miller, a Redfin real estate agent in Houston, buyers choosing not to deal with bidding wars prefer new construction homes because builders rarely impose deadlines for offers. Furthermore, they can purchase a house at the asking price instead of bidding at a higher price.

With record-low mortgage rates and strong demand for homes, we think this is an excellent time to invest in real estate. With an investment mortgage, you will usually be able to tell whether you are approved relatively quickly. America Mortgages has pretty cut and dry standards when it comes to getting you approved for an investment mortgage. America Mortgages has loan programs for U.S. Expats with or without U.S. credit. We understand that living abroad often changes factors and your ability to borrow in the U.S. Our loan programs are tailored towards your exact situation.

What are you waiting for?

For more information on U.S. or mortgage loans in other countries, please enquire via email – hello@americamortgages.com.

Source: Redfin

Rent prices show largest one-month growth since the beginning of the pandemic!

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Rental prices are bouncing back! We see the biggest single-month increase in rent prices since the beginning of the global pandemic. Apartment rental app Zumper reports that the price of a one-bedroom unit increased by 1.1%, and the average rent for a two-bedroom apartment in February rose 0.9%.

Through last year, Covid-19 disrupted the rental scene drastically. One-bedroom units in New York and Maine saw significant drops in rent prices. Even states like Massachusetts, Connecticut, Maryland, and Virginia also saw median rent prices go down during the pandemic’s peak.

There’s still good news for U.S. real estate investors as in just 2 months into 2021, low rental rates have finally reached the bottom. In some cases, like New York City, San Jose, and Boston, it is actually the first time rental prices have increased since the first quarter of 2020.

We think these events have presented an excellent time to secure an investment property or second home. Besides being able to take advantage of the higher rental yields and improved cash flow, property values in these states will likely correct up as the market heats up this summer. What better time to do this than now?

The increase in rates is largely tied to the uptick in mortgage rates that has slowed down the demand for new home purchases and refinances. Notably, year-over-year rate comparisons show that in major cities, there are still some great deals available. In San Francisco, the average one-bedroom is now 24.3% more affordable than it was a year ago, and two-bedroom rentals are 23.6% cheaper.

America Mortgages is committed to helping our clients find the best mortgage solutions. Keen to know what your mortgage options are? With a 97% approval rate for both U.S. Citizens & Foreign Nationals, our global team of U.S. mortgage specialists are ready to help you! Find out all about your mortgage options with us today!

For more information, please contact hello@americamortgages.com.

Sources:Fortune

Hong Kong family buys a home in Dallas to earn USD yield.

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The Client

Our client saw our ads in the local papers and reached out to enquire about a mortgage. We were told that the current political climate in Hong Kong has made many locals look into overseas options.

How We Helped

While we don’t normally advise where to purchase, we noticed that many of our overseas investors looking strictly at rental yield tend to choose Texas.

Texas is a very popular market for overseas real estate investors and local U.S. real estate investors, so our client wanted to get pre-approved before making any offers on the property. We were able to pre-approve the client and issue a letter. Once he identified a property, he supplied the pre-approval letter giving both himself and the seller the confidence he had his mortgage financing worked out in advance.

Getting pre-approved and underwritten for a loan is a great way to start the process for anyone thinking of investing in U.S. real estate.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
Hong Kong Citizen $375,000 $262,500 70% 4.875%
Term Address Property TypePurposeLoan Type
30 year fixed (regardless of the borrower’s age) Dallas, TexasSingle-Family Home Purchase Residential
Nationality Hong Kong Citizen
Property Value$375,000
Loan Amount$262,500
LTV70%
Rate 4.875%
Term30 year fixed (regardless of the borrower’s age)
Address Dallas, Texas
Property TypeSingle-Family Home
Purpose Purchase
Loan TypeResidential

Canadian doctor in Vancouver buys condo in Atlanta for rental income using 1031 Exchange.

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The Client

Our client from Australia came to us online and wanted to look for low-cost residential housing to earn investment income. They like the Midwest cities due to their low entry point.

How We Helped

Given the capital tax implications of selling, we suggested using a Tax Program called “1031 Exchange,” which allows property owners to swap one investment property into a more expensive one, which allows capital gains taxes to be deferred. They reviewed this option with their tax advisor and were able to roll the gains into the new purchase allowing them to buy a nicer property located in a better school district that equated to higher rental yields.

We found the client a very competitive foreign national mortgage, and they were able to take advantage of this Tax Incentive. (Also see Can a Canadian Buy a House in the USA?)

Loan Details

NationalityProperty ValueLoan AmountLTVRate
Canada Citizen $480,000 $264,000 55% 4.750%
Term Address Property TypePurposeLoan Type
5/1 ARM Atlanta, Georgia Single-Family Home Purchase Residential
Nationality Canada Citizen
Property Value$480,000
Loan Amount$264,000
LTV55%
Rate4.750%
Term5/1 ARM
State Atlanta, Georgia
Property TypeSingle-Family Home
Purpose Purchase
Loan TypeResidential

Reasons NOT To Buy In Cash.

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In today’s low-inventory housing market, Real Estate investors are looking for any way to get an advantage over the other buyers when putting in an offer on a property.

Part of that strategy is not to buy in cash. If you have the means, an all-cash offer is a great way to fast-track a deal. A seller, more often than not, will consider a cash deal over a mortgage. The deal’s success isn’t reliant on a lender’s approval following an appraisal, and you’ll own the home outright after the transaction with no mortgage.

“With two similar offers, all cash or financing, it’s likely that an all-cash offer would be the most attractive and less risky to the seller and seller’s agent.”

“For Non-U.S. citizens, cash transactions make up a majority of Real Estate investments due to what is perceived as the lack of access to consistent and affordable financing options. However, that is not true any longer. Our focus is being able to provide competitive, viable, and easy access to U.S. mortgage loans for non-U.S. citizens. And we’ve done it to perfection.”Donald Klip

BUT EVEN IF YOU HAVE ENOUGH LIQUID ASSETS TO PURCHASE A HOME WITHOUT A LOAN, IS IT ALWAYS A GOOD IDEA?

Here are several reasons not to buy a home with cash:

LIQUIDITY, LIQUIDITY, LIQUIDITY

You always hear the axiom in Real Estate – Location, location, location, and although that may be true, it’s not wise to purchase a home with cash if you have only just enough liquidity to pay for it. Liquidity issues at some point in time affect everyone.

The inability to move currency across borders to cover large expenses could also be a factor. It’s essential, especially as a non-U.S. citizen, to have access to available funds for any number of unexpected needs, from a new roof to other large repair expenses.
You may even want to have enough funds on stand-by to sustain the mortgage if the property goes un-rented.

ACCESS TO SOLID FOREIGN NATIONAL MORTGAGES ARE AVAILABLE

With a down payment of 30 percent or more for a foreign national mortgage loan, you don’t have to worry about additional mortgage insurance when it comes to a standard U.S. conventional loan. With a lower LTV (loan-to-value), a lower interest rate will normally be available due to the lower risk lenders perceive that you’ll default on the loan.

For the younger generations looking to invest in a market that doesn’t have a huge sticker shock, acceptable yields, and stable appreciation, obtaining a mortgage is a smart move.

“Unlike their parents and grandparents, Millennials in Asia are more comfortable with taking on a mortgage loan,” says Donald Klip. He notes the younger generations’ familiarity with the U.S. credit market from either extensive travel or schooling makes taking on debt an easier choice than for older generations that have built up Real Estate wealth over time but may not be accustomed to having mortgage loans.

Although interest rates may be on the rise, they remain low compared to previous decades. With 30% down, the rates are still favorable and fixed for periods of 5, 7, 10, or 30 years. America Mortgages is currently offering fixed-rate mortgages at slightly over 6% without verifying income, U.S. credit, or residency. Compare that to the 1980s, when a foreign national mortgage loan was almost impossible to obtain, and mortgage rates were at an all-time high of 18%, there is no question on why you should leverage up.

MORE BANG FOR YOUR BUCK

Even if you’re looking to buy an investment property outside a pricey metro area such as NYC, San Francisco, Washington DC, or L.A., and if you have enough funds to pay outright, you’re likely sitting on a sizeable amount of capital. However, the decision isn’t necessarily between buying a property outright or keeping money earning very little in the bank. Consider other forms of investment to grow your wealth. Use those funds and your cash to “leverage up” by purchasing more than one investment property, increasing your portfolio and holdings quicker.

YOU’LL MISS OUT ON POTENTIAL TAX BREAKS

Although we suggest discussing any potential tax benefits with your tax advisor, most homeowners with a mortgage receive a tax benefit on the interest paid to the lender. The larger the mortgage, the bigger the benefit, increasing the yield potential of your investment.

ALWAYS WEIGH THE PROS AND CONS

In an extremely competitive Real Estate market, an all-cash offer can provide the edge you need to get the seller to consider your offer more seriously than others. Often your offer may not be the highest, but the seller knows an all-cash off will make the closing process easier.

If you want to obtain financing, keep in mind that the seller may consider an offer that allows for easier financing. Often larger down payments and smaller mortgages will also be considered easier to close mortgages as it’s less risky for the lender.

“We do it all day, every day. It’s not difficult if you know the terrain and have the right relationships, and in most cases, we can find a U.S. mortgage loan for every non-U.S. Citizen or Expat client. Most U.S.-based mortgage lenders look at a borrower’s U.S. credit history to determine their ability to repay a mortgage loan.

However, at America Mortgages, we understand that as a non-U.S. citizen, you normally don’t have a U.S. credit, and often can’t show income in a manner in which the lender will approve.If a borrower was attempting to search this for themselves, be prepared. Finding a lender in the U.S. to understand your situation becomes time-consuming, frustrating and often unobtainable, not to mention staying up late at night in Asia to answer questions or provide documents. Our job is simple; to understand the complexity of analyzing risk, calculating foreign income, and alternative sources of acceptable credit verification to find our client the best possible loan.”Donald Klip

If you’re a non-U.S. citizen looking to invest in U.S. Real Estate, we recommend sending America Mortgages an enquiry. Who knows, you may be on your way to Real Estate investing before you know it.

For more information, please contact hello@americamortgages.com.

American Expat teacher in Singapore refinances home in Tampa, Florida.

mortgage for overseas property

The Client

International school mathematics teacher purchased a home in 2019 with a high-interest rate. Since she had long term tenants and the rent was covering the mortgage, she hadn’t thought about refinancing until one of her colleagues mentioned lowering their mortgage rate using America Mortgages.

How We Helped

Although we gave her a very detailed report on the various options, including releasing up to $68,000 in cash out of her property, her priority was to get the lowest rate possible and maximize the rental yield.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.S. Citizen $313,000 $181,450 58% 3.35%
Term StateProperty TypePurposeLoan Type
30 year fixed Tampa, FloridaSingle-Family Residence (SFR)RefinanceResidential
NationalityU.S. Citizen
Property Value$313,000
Loan Amount$181,450
LTV58%
Rate3.35%
Term30-year fixed
StateTampa, Florida
Property TypeSingle Family Residence
PurposeRefinance
Loan TypeResidential

See Other Cases

Can Foreigners Buy Property in USA?

mortgage for overseas property

If you’re from Hong Kong, Singapore, China, or even India, real estate prices have increased beyond the point of where you can maintain a positive yield, but this isn’t true in the USA. So, can foreigners buy property in USA?

Yes, but no one said that trying to buy a home in America as a non-U.S. citizen, resident, or foreigner isn’t going to be tricky, at least initially.

If you’re wondering whether a non-resident can buy US real estate, the short answer is “yes”, but it’s easiest if you pay cash. If you need financing to purchase US real estate as a non-citizen, getting a mortgage is challenging, which is why America Mortgages ONLY specializes in these types of mortgages.

Can Foreigners Buy Property in USA?

Anyone may buy and own property in the United States, regardless of citizenship. Hong Kong, Singapore, China, Indonesia, and other countries in Asia focus on the U.S. when investing in real estate. Since there are no laws or restrictions that prevent individuals with foreign citizenship from purchasing or owning property in the USA, it is the perfect place to invest.

Besides investment in real estate, many foreign nationals /non-US residents purchase vacation homes in the United States. Many wealthy foreign investors purchase investment property such as multi-unit apartments or condos, single-family homes, and even business properties like shopping malls.

Getting a US mortgage as a non-resident

Purchasing a house in the U.S. as a foreign citizen is simple if you plan to pay in cash (or having all the money saved to buy the home in one lump sum). If you’re not in the financial position to purchase a home with cash or find leverage is a better option for you, you’ll need to obtain a mortgage loan to purchase a property. This is where the process becomes tricky. Fortunately, America Mortgages’ primary focus is on the U.S. market, and its only focus is these types of mortgages.

Most U.S.-based mortgage lenders look at a borrower’s U.S. credit history to determine their eligibility for a mortgage loan. As a non-U.S. citizen, you don’t have a U.S. credit report, making it difficult for lenders to analyze the risk of loaning you money to purchase a home. That means your lender will elevate your risk factor as a borrower. This doesn’t have to be the case. Nor do you have to stay up late at night in Asia, calling lenders, brokers, and banks trying to find someone that will understand your situation. It may take you longer to find a lender who is willing to work with you, and it may take longer to get approval for your mortgage loan. You might also pay a higher interest rate.

We understand the complexity of analyzing risk, calculating foreign income, and alternative sources of acceptable credit verification. We do it all day, every day. It’s not difficult if you know the terrain, and in most cases, we can find a U.S. mortgage loan for every client.

Implications for Selling a U.S.-based Property as a Foreigner

Eventually, you might decide to sell your U.S.-based property. Before you purchase property in the U.S., it’s good to be aware of the rules and requirements should you choose to sell your property in the future. The IRS requires that buyers of property from foreign citizens withhold 15% of the amount realized on the disposition. If the buyer does not withhold this amount, they may be responsible for additional taxes. The rules surrounding this are somewhat complex but are outlined in the IRS FIRPTA publication, and more information can be found in the International Tax Gap Series.

It would be best if you worked with an agent you trust who won’t push you beyond what you’re comfortable offering or rush you into making a bad decision. Although we do not sell Real Estate ourselves, our network within the Real Estate world, especially within the U.S., is not only strong but also vetted. We are happy to point you in the direction of agents we have worked with in the past.

One of our associates or partners will be happy to answer any questions you may have regarding mortgage financing for your investment.

For more information, please contact hello@americamortgages.com.