Author: Premela R.

From GMG: France Alert! 100% Financing Available for Luxury French Property!

Post author By Premela R.
Post date October 26, 2023

Our Parent Company, GMG, Presents..

Mortgages for Luxury French Property with…

100% Purchase Price Financing!

THE ALLURE OF THE FRENCH RIVIERA

Nestled on France’s southern coast, near the Italian frontier, the French Riviera showcases some of the most enchanting towns you could envision. With its chic allure, this region has magnetized celebrities for generations. Boasting approximately 300 sunlit days annually, its climate is nothing short of ideal. From designer boutiques, to the array of nearly 40 Michelin-starred restaurants, it’s a destination of elegance. It’s also a thriving community of English and American expatriates.

TOP DESTINATIONS FOR PROPERTY OWNERS

Surrounded by both the majestic mountains and the serene sea, the Riviera promises a perfect balance. While the coast will be your regular retreat, snow-capped peaks are always within reach for a winter getaway. Explore the top places to reside in the Riviera:

Antibes: Originating from the 16th century, Antibes exudes a maze-like ambiance. Renowned for its breathtaking golden glow, which has attracted artists over the centuries, it houses magnificent villas in the wooded Cap d’Antibes.

Cannes: Apart from the high-end boutiques and its iconic film festival, Cannes is a stone’s throw from the secluded Lérins Islands.

Nice: As one of the significant French cities, Nice offers a vibrant nightlife, chic boutiques, and diverse museums.

Saint-Jean-Cap-Ferrat: This petite peninsula is the address for some of the Riviera’s most luxurious estates and also offers upscale dining options and serene beaches with panoramic views.

Saint-Tropez: Famed for its pristine beaches and dynamic clubs, Saint-Tropez is a haven for entertainment seekers but also has developed into a family holiday destination.

Now to the good stuff….

FINANCING FOR FOREIGN NATIONALS

Problem: Securing financing for Foreign Nationals to purchase property in France has always been difficult – time zone, language, lack of understanding for both lender and borrower, and other issues. Most banks and financing institutions are not focused on Foreign Nationals as the domestic market is strong, and they have enough business to satisfy them.

The GMG Solution: Our GMG European Lender Acquisition team has worked with a few smaller private banks to create a financing solution for our international clientele with a structure that suits their specific needs.

ELIGIBILITY AND REQUIREMENTS

For Foreign Nationals seeking finance in this exclusive domain, banks have set specific benchmarks to evaluate potential candidates.

1. Geographical Preference

Prime Locations: It’s imperative for the property in question to be situated in sought-after areas. This encompasses regions such as Paris, leading stations in The French Alps, and The French Riviera.

Emerging Desirability: The South West has been gaining traction recently, making it an area of interest for Private Banks.

2. Property Type

Prospective properties should fall under categories such as: Luxury Apartments, Modern Residences, Contemporary Villas, Maisons de Maître, Manoirs, or Impeccably Refurbished Chateaux (case-by-case basis).

3. Loan Size

Minimum loan amount is €1M, excluding ancillary fees.

4. Our 100% LTV Solution!

In this structure, the client will invest a portion of funds equal to 30-50% of the loan amount into an interest-earning product.

In return, the bank will finance 100% of the purchase amount of the property (excluding fees)!

Client earns investment income, which may be more than the interest paid on the mortgage = positive carry.

5. Age Bracket

Applicants should be no older than 65 years at the submission time, with a preference for those below 60.

6. Financial Overview

Generally, the focus is on High Net Worth (HNW) individuals, specifically those boasting a net valuation exceeding €2M. Liquid assets or readily available cash remains a pivotal factor in discussions.

HOW IT WORKS

Example
Purchase price: €1,000,000
Loan amount: €1,000,000 (100% LTV)
Interest rate: 4.50%
Loan duration: 20 years
Loan type: Principal + Interest

Investment amount: €500,000 (50% of loan amount)
Investment return: 4.50% Compounded

Mechanics
The 100% LTV mortgage
€1,000,000 @ 4.50% for 20 years
= Total mortgage interest PAID = €518,359

The interest-earning investment for 50% of loan amount
€500,000 investment @ 4.50% “Compounded” for 20 years
= Investment value end of Year 20 = €1,205,000 – €500,000 principal
= Total interest EARNED = €705,000

€705,000 EARNED – €518,359 PAID
= Net POSITIVE cash flow = €186,641

That is to say, the bank will give you a positive carry-trade for using their mortgage, and not only is the mortgage FREE, you MAKE money!

THE PURCHASE PROCESS

Navigating property acquisition in France is smoother with the guidance of a property buyer’s agent familiar with the region and the nuances of French property transactions. Once you’ve found your dream home, the steps are as follows:

Proposal Submission: You’ll submit a written proposal. This will be forwarded to the property owner for a response. If the proposal gains approval, both parties – the buyer and the seller – will endorse the ‘Compromis de Vente.’ This preliminary agreement outlines the property specifics and the sale terms. As the transaction progresses, especially during conveyancing, certain terms in this contract might undergo modifications.

Reflection Window: Following this, there’s a 10-day cooling-off window. During this phase, should you reconsider the purchase, you can withdraw without repercussions. Specifically, the 5-10% earnest money you’ve placed as a deposit is fully refundable.

Financing Initiatives: At this juncture, the financial groundwork commences (details above).

Conveyancing Phase: Post cooling-off window, the conveyancing phase kicks off. This process, extending up to three months, involves a series of property evaluations, all supervised by the notaire.

Finalization: After a thorough review and addressing any reservations, the concluding payment is made to the notaire. Subsequently, both parties validate the ‘Act de Vente,’ essentially the property’s title deed.

In conclusion, owning a home in the South of France is now achievable for non-residents with our new GMG Luxury France Mortgages! I hope I get an invite to visit you one day!

Global Mortgage Group offers innovative financing solutions to meet the diverse needs of our global clientele, including Overseas Expats, Foreign Nationals, Family Offices, Investment Funds, High-Net-Worth Clients, and Private Banks. Contact us at [email protected] to start your Riviera investment journey today!

If you have any questions, please feel free to contact me directly at [email protected] or my personal mobile +65 9773-0273.

www.americamortgages.com

The Great Mortgage Rate Shift: What Investors Need to Know

Post author By Premela R.
Post date October 20, 2023

Are rising interest rates a hindrance or a golden, hidden opportunity for savvy U.S. real estate investors? In a mortgage environment where rising interest rates can trigger unease, it’s essential to grasp that the U.S. real estate market possesses its own distinct dynamics.

In this article, we will explore the facets of investing in real estate during times of high interest rates, shedding light on the untapped potential that lies within what may be perceived as a challenging terrain. Despite market fluctuations in everything from equities to crypto and the allure of alternative investments, one constant is always there: the enduring need for housing.

Even when conditions aren’t ideal, there will always be individuals seeking a place to call home, whether through rental properties or other real estate avenues. Read on for three tips you can reference if you’re looking to invest during a time of interest rate hikes.

Just last week, Barbara Corcoran, one of America’s most renowned real estate investors, posted to her one million followers that while high rates and high prices push “more buyers on the sidelines” to “wait it out,” she’s not exactly sure what everyone’s waiting for — because once interest rates go down, a home buying frenzy will begin, and prices will rise even more, she predicted.

How Does High Interest Impact Real Estate?

When the Federal Reserve increases rates, the market has a huge impact. Buying property gets more expensive. Therefore, the overall demand decreases for buyers who may have been looking previously, mainly from buyers who planned on buying properties to live in.

More buyers are priced out
Demand falls
Supply falls
Long-term impact depends on the growth of the overall economy

More Buyers Are Priced Out

The owner-occupied buyers, which make up a huge percentage of the U.S. real estate market, will wait, forcing them to stay put, causing a lack of inventory turnover or rent increasing rental prices due to higher demand.

With a rise in mortgage rates also comes a rise in people looking to rent out homes because they have limited options. This is the perfect opportunity for investors to look not at the interest rate, as they can always refinance if rates dip, but as a pure cash-flow play with appreciation once rates decrease.

Demand Falls

The demand for homes is lower when interest rates rise, which is what the Federal Reserve wants to happen. To maintain a stable market, increase affordability, and have lower interest rates in the long run, the Fed has to increase rates from time to time.

So, what does this mean for buyers and investors? With less demand for homes, investors may be wary of stepping into the real estate market, and buyers must either pay the price or wait until the federal funds rate goes down and the market is more favorable.

Supply Falls

The supply of homes can also face restrictions as homeowners are hesitant to sell because doing so would mean entering the market as buyers in a higher rate environment, which could significantly increase their borrowing costs. According to a recent Redfin report, about 80% of homeowners with mortgages currently enjoy interest rates below 5%. With rates now hovering between 7-8%, more sellers are choosing to stay put. As a result, active buyers are left with a dwindling inventory to select from.

In addition, according to the National Association of Realtors, the United States is currently experiencing a housing shortage of between 5.5 and 6.8 million units, with the gap between supply and demand widening every year.

Long-term Impact Depends on Growth of Overall Economy

The lasting effects of high interest rates on the real estate market depend on the overall performance and growth of the economy. As the economy stabilizes or expands, the dynamics of the real estate market may evolve, potentially creating new investment opportunities in this challenging landscape.

3 Tips for Investing in Real Estate in High Interest Times

So, you want to invest in real estate despite market volatility? This certainly isn’t impossible, and these tips may help shape a successful investment strategy:

Buy if you can
Consider a long-term strategy
Utilise fixed interest-only loans

Buy If You Can

Higher interest rates will result in higher borrowing costs. This will price many buyers out of the market and result in less demand and possibly lower prices. It could be a worthwhile investment if you can afford to purchase a property during a time of high interest rates. Many home sellers will be trying to get their homes off of the market with no luck due to the lower demand. If you have the funds available, you may be able to negotiate a lower asking price by making a competitive offer (eg: cash, no contingencies).

You can also consider increasing your down payment amount. A higher down payment means less risk for the lender; this will help you secure a lower interest rate, which will lower your monthly payment and save you on interest in the long run, potential increasing your rental yield.

One factor that will always remain true, even during tough market times, is that people will always need a place to live, and property values have historically bounced back and increased after economic downturns.

Consider a Long-Term Strategy

Compared to last year, American homebuyers have seen a 24% decrease in their spending power, as interest rates surpass 7%. With market volatility making buying difficult, many people will opt for renting because it’s what they can afford. As an investor, this presents a unique opportunity for you.

Borrowing money becomes more expensive when the Fed raises rates, and the demand for rental homes and apartments will increase as many prospective homebuyers will struggle to qualify for a mortgage and will need to resort to renting. A rental property in the right neighborhood can be a great investment that can increase in value over time and help you hedge against inflation.

Purchasing a rental property can allow you to yield high returns, especially if you decide on a long-term strategy. According to a recent report from RentHop, a long-term rental strategy is more profitable for landlords that owning 1-3-bedroom units in major cities with higher long-term rents such as New York City, Miami, and Los Angeles.

Investing in a home or apartment can help you take advantage of the current increased rental demand. However, you could also consider investing in commercial real estate, like duplexes and multifamily properties.

Take Advantage of Interest-Only Loans

You might also want to consider financing options like a fixed interest-only loan mortgage. A fixed interest-only mortgage has a fixed 10-year interest rate, but you are only paying the monthly interest and not anything towards the principal. These loan programs give you the comfort of a fixed rate but the flexibility of paying only the interest until rates decrease. The beautiful advantage of this program is if rates never decrease (doubtful), you have a rate that is fixed, and after that, the interest-only portion will convert to a 30-year fixed principal and interest loan without an adjustment in rate. Yes, we stated that correctly, America Mortgages has a 40-year amortized mortgage regardless of the age of the borrower.

As a real estate investor, an interest-only loan can be a great option if you want to secure lower payments for a fixed period of time and gain predictability with your payments long term. This is especially lucrative for investors with a long-term hold strategy.

Many believe you should invest in real estate during times of high inflation. You just need to have an investment strategy and align yourself with real estate professionals who can help set you up for the long haul.

Final Thoughts

Are you considering investing during high-interest times? You could have some luck here and achieve a significant return with the proper approach. As mentioned previously, high interest rates are not necessarily a reason to step out of the market. Interest rate hikes can allow investors to take advantage of having less buyers in the market and increased demand for rentals.

A rising rate environment doesn’t need to slow you down. People will always need housing, and even as we approach an economic downturn, real estate has historically bounced back and increased in value over time.

As a company, America Mortgage’s only focus is providing U.S. mortgage financing for non-resident U.S. real estate investors, both Foreign Nationals and U.S. Expats. If you’d like to schedule a no-obligation appointment with one of our U.S. loan officers to discuss U.S. mortgage options, please use our 24/7 calendar link.

www.americamortgages.com

Pure Asset-Backed Lending Now Available for AM & GMG Clients

Post author By Premela R.
Post date October 12, 2023

For decades, and perhaps even longer, HNW and UHNW (ultra-high-net-worth) individuals have used real estate bridging loans as a “secret” tool to access liquidity quickly, easily, and with the reliability few loans other loans can provide. This “tool” is now known and available to everyone, regardless of their net worth.

When it comes to real estate, having quick access to cash can often be the key to success. Whether you’re a seasoned real estate investor with a diverse portfolio or just stepping into the world of real estate, this article is tailored to address the benefits and requirements of asset-backed or asset-based lending.

What is Asset-Based Lending?

Asset-based, also known as asset-backed or bridge lending, is the practice of loaning money in an agreement that has been secured by some form of collateral – in this case, real property. The terms of asset-based loans depend on the value of the assets that are being offered as security and the type of assets they are. In essence, you are putting future revenue on the line in order to get access to money in the present. Asset-based lenders will typically provide funds on an agreed-upon percentage of the asset’s value, typically ranging between 70% and 75%. These loans are often funded by private lenders who don’t have the same requirements that are typical with banks.

Accessing Liquidity to Take Advantage of Market Conditions

In the dynamic world of real estate, staying ahead often requires access to immediate liquidity. When market conditions are favorable, seizing opportunities quickly can make a significant difference in your investment journey.

Bridge loans stand out as the preferred funding option for various purposes, including:

Highly structured transactions
Discounted note payoffs
Lease-up stabilisation
Redevelopment of existing properties
Repositioning of a tired or underperforming asset
Property acquisitions with a short closing timeline (or challenges on the property or sponsor)
Recapitalisations/Debt Restructuring or Partner Buyouts
Other uses on a case-by-case basis depend on borrowers’ specific funding needs, where traditional funding sources like banks or insurance companies will have difficulty approving such loan requests.
Buying real estate with a “same-as-cash” basis

How Do You Qualify for a Bridge Loan?

Bridge loans are a valuable tool for investors seeking short-term financing solutions. But how do you qualify for one?

Our most popular terms are as follows:

Loan term: 1-3 years Interest Servicing Only (Interest-Only)
Interest Roll-up (Interest payments are taken out of loan proceeds)
No U.S. credit required
Minimum loan amount: $1,000,000 (Residential Bridge Loan) and $3,000,000 (Commercial Bridge Loan)
Up to 75% Loan-to-Value
24-36 hour approval
Funding in 1-2 weeks

Which Countries Are Bridge Loans Available In?

For investors with global interests, it’s crucial to know where bridge loans are available. America Mortgages and Global Mortgage Group specialize in providing bridge lending solutions in countries such as the United States, Canada, Singapore, Thailand, Philippines, Hong Kong, Australia, Dubai, U.K., and various other EU countries. These loans are tailored to meet the unique needs of our clients worldwide.

How Accessible Are Bridge Loans?

Bridge loans’ accessibility depends on various factors; Geographic location, lending options, property type, loan-to-value ratio, exit strategy, and market conditions all influence the structure of a bridge loan. At America Mortgages, we specialize in helping U.S. expat investors and foreign nationals navigate these complexities. We find the most accessible bridge loan solutions tailored to your specific needs and circumstances.

What’s Needed to Qualify?

The higher your free equity value, the more cash you can unlock! When you’re applying for a bridge loan, the value of your property is one of the most important factors lenders consider. That’s because bridge loans are secured against your property, a true asset-backed solution. At America Mortgages, the minimum property value to qualify for a bridge loan is $500,000. But if your property is worth more, you could be eligible to borrow even more cash, which can be used for a variety of reasons. In most cases, there is not a requirement for use-of-funds.

Why Would People Use Bridge Loans to Get Liquidity?

Bridge loans provide quick access to cash when needed. They’re handy when you need funds fast, whether for seizing investment opportunities or renovating properties without delays. At America Mortgages and Global Mortgage Group, we understand the importance of acting quickly. We’ve successfully closed bridge loans in 3 days to help investors like you maximize their real estate potential.

The U.S. real estate market holds promise for investors who are well-prepared and informed. Bridge loans are just one tool at your disposal, but they can make a significant impact when used strategically. With our expertise, we can help you maximize your investments and reach your financial objectives.

If you have any questions or need assistance with your mortgage goals, please reach out to us at America Mortgages. We’re here to assist you in reaching your real estate investment goals.

Investors, it’s time to seize the opportunities available to you. Don’t hesitate! Contact us today at [email protected] to learn more. We’re here to help you secure the financing you need to achieve your real estate investment goals.

www.americamortgages.com

GMG Listed Shares Financing – Now Available for America Mortgages’ Clients

Post author By Premela R.
Post date October 6, 2023

As you may have read in our previous emails, real-estate bridging loans have been the most active part of our business this year as traditional bank financing has tightened globally.

When the need for liquidity arises with a short time window to fund, we can use the value of the property as collateral for a short-term loan.

In Singapore, we are the leaders in high-value real estate bridging financing for HNW individuals, with nearly $400M in funded bridging finance deals YTD. For more details, refer to our recent press release highlighting a recent transaction.

We offer short-term asset-backed loans against real estate in: USA, Singapore, Canada, UK, HK, Thailand, Philippines, and Australia.

Now, we have another asset-backed solution!

Listed shares…..

What is listed-share financing?

Simply put, share financing helps investors by utilizing their existing shares to fund new investments without having to sell any of their shares.

Capitalization through investment, a stock loan, or other liquidity and financing transactions allows owners of publicly traded stock the flexibility to gain access to the locked-up value of their freely traded stock position.

GMG Share Financing is designed specifically for corporations, its employees, officers, and major holders of publicly traded companies while providing total privacy to our clients.

Our process is quick, transparent, and completely confidential.

Financing proceeds can be used for personal or business purposes or to diversify or hedge current stock positions.

Funding is quick, with a transaction closing in as little as 3 to 7 business days.

Terms of providing you with liquidity and funding are based on evaluation of the risk and future performance associated with the securities involved in the transaction.

The transaction term is typically three years, with Interest payments or Maintenance Fees on a quarterly or semi-annual basis.

Financing and provision of liquidity are interest only or accompanied by modest Maintenance Fees, and additionally, are non-recourse.

The recipient of funding has the option of simply walking away at any time with no further liability and no personal or corporate guarantees.

In the event of a default, there is no report to any credit bureaus or governmental agencies, nor is there a file of public notice. There is no adverse consequence to the client’s credit.

Listed share financing is available in:

Asia, Australia, Canada, Europe, Mexico, South America, and the Middle East.

Our Lenders

Our stock lenders are privately held asset-based lending companies that provide individuals and institutions with flexible, customized non-recourse high-value stock loans.

When Banks say NO, we say YES!

Our lenders are also uniquely positioned to provide stock loans and secured share financing even when banks, brokerage firms, and securities houses are unwilling or unable to do so; this is due to their global market reach, extensive relationships, and applicable jurisdictional law.

Benefits of GMG Share Financing

Fast transaction & funding
Non-recourse
No personal or corporate guarantee
No credit reporting in the event of a default
Private & confidential
Quick closing
Reduce the need for traditional bank recourse financing
No out-of-pocket expenses or upfront fees
Low interest rates or maintenance fees
Fair share pricing using a three or five-day average
Flexible terms
Large transaction amounts accepted

Transaction Process

Submit a stock for a quote
Term Sheet issued
Term Sheet signed
KYC info for shareholder and shareholder info provided to the Lender
Agreement provided to Shareholder

For specific information on rates and terms, please reach out to our team at [email protected] or contact me directly at +65 8430-1541.

MUST READ: How Fed Interest Rate Decisions Impact Real Estate Investors

Post author By Premela R.
Post date September 29, 2023

Real Estate Investors - America Mortgage

The Federal Reserve’s interest rate decisions play a significant role in the real estate market, impacting investors in different ways. This article explores two perspectives on how Fed interest rate decisions can affect foreign national investors and U.S. expat investors in the real estate market.

Point of View 1: The Fed Will Raise Interest Rates

“The Federal Reserve’s job is to do the right thing, to take the long-run interest of the economy to heart, and that sometimes means being unpopular. But we have to do the right thing.” – Ben Bernanke, Former Chairman of the Federal Reserve.

Impact on the Real Estate Market:

If the Fed raises interest rates, it becomes more expensive to borrow money. This will likely cool the housing market further, discouraging potential owner-occupied buyers with higher mortgage rates and potentially, in some markets, could lead to a decrease in property prices. Comparing interest rates to post-Covid, many view this as a “high-interest rate environment”; however, it’s essential to note that U.S. mortgage rates, even with recent increases, still remain historically low.

Real Estate Market -30 Year fixed Rate Mortgage

Investors who act now may benefit from several advantages:

1. Future Refinancing Potential: What goes up, must come down. If the Fed decides to reduce interest rates in future cycles, property owners can explore refinancing options for lower mortgage rates, reducing monthly payments, and releasing equity for other investments or property improvements.

2. Stable Mortgage Payments with 30-Year Fixed: Opting for a 30 or 40-year fixed-rate mortgage period provides stability and predictability in mortgage payments, even if the Fed raises rates. This not only provides investors with financial security but also grants them peace of mind, as they have a clear, unchanging monthly payment to budget for.

3. Affordability and Negotiation Power: The fear of further rate increases may lead some potential investors and many owner-occupied buyers to remain on the sidelines, assuming it’s a high-interest rate environment. In reality, if the property is purchased as a rental investment, interest rates are still favorable. Investors who act now not only secure fixed rates but maintain their affordability advantage. Moreover, they tend to be in a position of power to negotiate deals that did not exist when rates were low.

4. Everything is Cyclical: Again, what goes up, must come down. If you’re able to take advantage of the current buyer’s market and purchase a property with favourable terms now when interest rates go back down to 4-5%, the FOMO frenzy will happen again, and likely, property prices will appreciate quickly.

Will the Fed’s Interest Rate Hikes Make Rental Yields Unattainable?

As interest rates rise, it becomes tougher for homebuyers to afford their dream properties. This creates an ideal scenario for real estate investors as more individuals opt for renting. As the number of people unable to buy or choosing to wait grows, rental prices go up. This ongoing trend boosts rental yields, even in the face of higher interest rates. This highlights the importance of timing for potential real estate investors, especially foreign nationals and U.S. expats.

In summary, the current market landscape presents an opportune moment for investors to make strategic real estate purchases. By recognizing that interest rates, even if they rise, are still overall historically low, investors can secure stable mortgage payments, preserve negotiation power, and position themselves to capitalize on potential future interest rate reductions through refinancing. Now is the time to act and benefit from the unique advantages offered in today’s real estate market.

Point of View 2: The Fed Will Hold Steady or Start Decreasing Interest Rates

If the Federal Reserve keeps interest rates where they are or even lowers them, it could have some notable effects on the real estate market. Lower rates tend to make homes more affordable, which can attract more buyers and potentially push property prices higher.

Impact on Housing Prices:

If the Fed maintains or decreases interest rates, it can stimulate housing prices. Lower rates enhance affordability, attracting more buyers and potentially driving property values higher.

Will People Sitting on the Sidelines Jump Back into the Market?

Lower interest rates can serve as a catalyst for individuals who have been patiently waiting on the sidelines. Reduced borrowing costs make homeownership more accessible, motivating potential buyers to enter the market. This surge in demand could create a favorable environment for those who have already invested in real estate.

Potential for Refinancing:

Date the Rate. Marry the Property. One strategic advantage of buying real estate now, especially when interest rates are low, is the possibility of future refinancing. If the Fed does indeed decrease interest rates in the future, investors can explore refinancing options to secure even lower mortgage rates. This not only reduces monthly payments but also allows investors to release equity for other investment opportunities or property improvements.

Impact on Foreign National Investors and U.S. Expat Investors:

Lower interest rates can make U.S. real estate investments more attractive to foreign national investors and U.S. expats. Reduced borrowing costs in U.S. dollars can create financial advantages for entering the American real estate market.

In conclusion, acting now in the real estate market while interest rates remain favorable presents a dual opportunity: the potential for immediate returns through rental yields and the prospect of future refinancing benefits should the Fed decide to reduce interest rates further.

At America Mortgages, we know the Fed’s interest rate decisions can be uncertain for foreign national and U.S. expat investors. We’re here to help. Our experienced loan officers can clarify how these decisions impact your investments. Don’t wait – secure the ideal mortgage for your needs and unleash your real estate investment potential.

Contact us today to get started on achieving your investment goals. [email protected]

www.americamortgages.com

Top 10 U.S. Cities to Buy a Home for Under $250,000 [2023]

Post author By Premela R.
Post date September 22, 2023

In the ever-changing U.S. real estate scene, recent years have seen significant shifts. Millennials are redefining their living preferences, moving from bustling cities to peaceful suburbs, and vacation properties are capturing investors’ attention. Throughout this journey, property prices have experienced remarkable changes. Whether you’re a first-time homebuyer, an experienced investor, or even a U.S. expat or foreign national, the city you choose for your investment can greatly impact potential appreciation and rental income.

Real estate investment is a strategic move that can provide reliable rental income while potentially increasing your overall wealth through property appreciation. For many, it’s a cornerstone of their path to financial success. Here’s the list of 10 U.S. cities where buying a home for under $250,000 promises both affordability and the potential for solid returns on investment.

Maine

Median Purchase Price: $240,000

Average Rental Income: $1,700

Maine is a beautiful state with a low cost of living and a variety of outdoor activities, making it a great place to invest in a rental property. In addition to its affordability and strong rental market, Maine also has a growing population. This is due in part to the state’s strong job market and high quality of life. As the population continues to grow, so too will the demand for housing. This makes Maine an ideal place to invest in a rental property for the long term.

Vermont

Median Purchase Price: $245,000

Average Rental Income: $1,800

Vermont is a charming state with a low cost of living and a variety of outdoor activities, making it a prime spot for rental property investment. Vermont not only offers affordability and a robust rental market but also boasts a stable economy, a high quality of life, Fortune 500 companies, a low unemployment rate, breathtaking scenery, and vibrant cultural attractions.

New Hampshire

Median Purchase Price: $250,000

Average Rental Income: $1,900

New Hampshire, a scenic state with an affordable lifestyle and abundant outdoor recreation options, presents an ideal landscape for rental property investment. With a strong job market, a high quality of life, low unemployment, captivating scenery, and rich cultural offerings, New Hampshire offers a well-rounded living experience and promising investment opportunities.

Massachusetts

Median Purchase Price: $255,000

Average Rental Income: $2,000

Investing in Massachusetts real estate presents several compelling benefits. The state’s strong and diverse economy, driven by sectors like technology, healthcare, and education, creates a stable and lucrative real estate market. The presence of renowned universities like Harvard and MIT attracts a consistent flow of potential tenants and buyers, bolstering demand.

Rhode Island

Median Purchase Price: $260,000

Average Rental Income: $2,100

Rhode Island’s real estate scene offers several attractive benefits. The state’s stable economy, driven by various industries, provides a secure and potentially profitable investment opportunity. Additionally, Rhode Island’s vibrant culture and the presence of respected institutions like Brown University continually attract potential tenants and buyers, maintaining a robust demand for real estate properties.

Connecticut

Median Purchase Price: $265,000

Average Rental Income: $2,200

Connecticut’s real estate market offers numerous advantages. The state’s strong economy, diverse job opportunities, and proximity to major cities like New York make it an appealing destination for real estate investment. With its charming towns, excellent schools, and picturesque landscapes, Connecticut attracts both renters and homebuyers, ensuring steady demand in the housing market.

Pennsylvania

Median Purchase Price: $275,000

Average Rental Income: $2,400

Investing in Pennsylvania’s real estate market presents various benefits. The state’s diverse economy, affordable living costs, and rich history make it an attractive destination for property investors. With major corporate headquarters and esteemed universities like the University of Pennsylvania, Carnegie Mellon University, and Penn State University, Pennsylvania is a hub of education and business, appealing to a broad spectrum of tenants and buyers.

Maryland

Median Purchase Price: $280,000

Average Rental Income: $2,500

Maryland’s real estate market is a promising investment choice. The state’s strong job market, diverse population, and proximity to major metropolitan areas like Washington, D.C., create a favorable environment for real estate investors. Furthermore, the presence of major corporations and prestigious institutions like Johns Hopkins University and the University of Maryland enhances its appeal, particularly for residential real estate ventures.

Delaware

Median Purchase Price: $285,000

Average Rental Income: $2,600

Delaware’s favorable tax environment, proximity to major cities like Philadelphia, and a diverse economy make it an attractive destination for property investors. With a range of housing options, from suburban neighborhoods to coastal communities, Delaware appeals to a broad spectrum of tenants and buyers, ensuring a steady demand in the real estate market.

Mississippi

Median Purchase Price: $205, 000

Average Rental Income: $1,600

Mississippi’s real estate market offers promising investment potential. The state’s low cost of living, affordable housing, and a variety of outdoor recreational activities make it an appealing destination for real estate investors. With prominent businesses and esteemed institutions like Mississippi State University, makes it a promising market for property investment.

Whether you’re an aspiring real estate investor or a first-time homebuyer in the U.S., America Mortgages is here to support your journey. If you’re eyeing a home in one of these cities, rest assured that even if you’re a non-U.S. citizen, you can qualify for up to 75% financing in all 50 states without needing a U.S. credit history. For U.S. expats, we’ve got you covered with up to 80% loan-to-value.

Every loan program we offer is tailor-made to our clients unique needs. With our deep understanding of the landscape, clientele, and processes, we stand as your trusted partner. Curious to learn more? Don’t hesitate to schedule a no-obligation call with one of our experienced loan specialists today.

Reach out to us at [email protected] to embark on your real estate journey with confidence.

What a 4% Interest Rate Could Mean for the U.S. Real Estate Market in 2024

Post author By Premela R.
Post date September 8, 2023

The U.S. real estate market has been thriving over the past several years. Even with increased borrowing rates, the lack of U.S. property inventory has kept property prices stable and, in many markets, expected to appreciate beyond market expectations.

Now, picture this: What if you purchased today at higher interest rates where owner-occupied buyers are sitting on the sidelines? Sure, your cost of borrowing would be higher; however, the likelihood of buying a property for more favorable terms and price is certainly higher. Now imagine what will happen to that property if interest rates were to drop to 4% next year.

Let the frenzy begin (again)!

Sophisticated real estate investors and funds jump at the opportunity to buy when others are not. This is when great deals are available, and competition for these properties is low. Sophisticated investors avoid getting caught in the FOMO frenzy when rates are low, and everyone is buying. They buy now and then simply wait to refinance to a lower rate when it makes sense. Marry the property. Date the rate.

Here’s the thrilling part for foreign national and U.S. expat investors who are contemplating a purchase in 2023. America Mortgages has loan programs such as 40-year fixed terms or 10-year fixed interest-only programs, which offset the current higher rates, making payments more affordable.

Shifts in Property Prices

If interest rates were to fall to 4%, one immediate consequence would likely be an upswing in property prices. Lower interest rates make borrowing more affordable, creating a larger pool of potential homebuyers including those looking to buy a home to live in (owner-occupied) and real estate investors. This heightened demand typically drives home prices up. However, the extent of this price increase would still depend on factors like the overall health of the economy and the housing supply.

Homeownership Trends and Refinancing

Indeed, things are changing in how people see owning a home. James Healy, a real estate expert, says Millennials are playing a big role in this shift. He explains, “The American dream of owning a home is still there, but now millennials are the ones taking the lead. They see real estate as an investment, even if they live there, and they might not feel as emotionally attached as in the past.”

Furthermore, homeowners are now embracing the concept of shorter-term investments, with an increasing number contemplating stays of just 2 to 3 years in their properties. This shift in mindset opens opportunities for refinancing. In situations like this, refinancing within a year to get interest rates under 4% starts to look really appealing, making it easier to achieve the dream of owning a home.

2024 Mortgage Rate Forecast

As per MBA’s projections, the average interest rate for a 30-year fixed mortgage is estimated to drop significantly by late 2024. If you are looking to buy a home now, it’s just a matter of waiting for interest rates to become more favorable. If rates go in the opposite direction, you have the comfort of knowing you’re in a long-term fixed-term loan regardless of the age of the borrower, Something very unique to global real estate investors.

Why Act Now?

Long-Term Appreciation: Property values are projected to continue appreciating over time. Although they might not grow in price as quickly, a recovering economy, low unemployment rates, and limited housing supply collectively support the enduring appreciation of property values.
Resourceful Lenders: At America Mortgages, we specialize in helping foreign national and U.S. expat investors navigate the U.S. property market. We offer a range of customized programs designed to simplify the loan qualification process.

In conclusion, while lower interest rates might seem important for the U.S. real estate market, there’s more to think about. Investors should consider how sophisticated real estate investors and funds look at property investing in a “down” market. They look at how property values could grow over time and creative financing options that can maximize yield. They also focus on the “now” while strategically planning for “tomorrow.”

Whether you’re a foreign national, a U.S. expat, or a seasoned investor, America Mortgages’ specialized lending programs are designed to make your homeownership dreams a reality. With our expertise and dedication to your success, we ensure that you not only secure favorable terms but also embark on a journey of financial growth and prosperity. Trust America Mortgages to be your partner in achieving your real estate goals. Your future in U.S. real estate begins with us. [email protected]

www.americamortgages.com

Marry the Property. Date the Rate. Good Investing? We think so, and here is why…

Post author By Premela R.
Post date August 31, 2023

Everyone is aware mortgage interest rates have been rising since early last year. The average interest rate on a 30-year mortgage is now almost 7%.

Those rates have undoubtedly made buying a home more expensive. In fact, according to the Mortgage Bankers Association, the median mortgage payment is now $2,162 — up 14% from a year ago, making it difficult for many homebuyers to afford; hence, they are forced to rent, creating a perfect storm for rental property owners.

Sophisticated investors rejoice as it is now a BUYER’S MARKET. If you take the popular “marry the property, date the rate” approach, experts say those higher rates might not seem all that bad.

What exactly does this approach entail, though? Here’s what you need to know.

What does “marry the property, date the rate” mean?

“Marry the property, date the rate” is a popular saying these days, thanks to higher interest rates. Essentially, the idea is that when you buy a house in today’s market, you focus on finding the perfect investment property or second home — a home you love and want to tie yourself to for the long term (like a marriage).

But your rate? That’s something you approach as only temporary — someone you’d date but never really commit to.

“This strategy suggests that you should prioritise finding the right property that checks all the boxes for your long-term needs and preferences rather than getting overly fixated on the current interest rates,” says Nick Worthing, America Mortgages’ Vice President of U.S. Lending. “In other words, focus on the specifics of the property itself, as it’s a long-term investment, while considering interest rates as a variable that can change over time.” He further states, “Sophisticated investors jump into the market when they are in the driver’s seat and can negotiate great deals. The novice investor jumps into the market when everyone else does. It doesn’t mean one investment strategy is right and the other is wrong; it simply means an – opportunity.”

The key component of the “marry the property, date the rate” approach is refinancing and potentially taking advantage of increasing property values once rates decrease again (and if history repeats itself, they will). If you choose this strategy, you’d take today’s interest rates as a necessary evil and then plan a refinance down the road — once rates fall and you’re done “dating” that initial rate.

When is it smart to “marry the property, date the rate”?

Taking the “marry the property, date the rate” approach can be a smart strategy as long as you follow two simple rules: First, make sure your mortgage payment is one you can comfortably afford for the foreseeable future and the rental amount is sufficient to cover all or most of that amount. There’s always the chance that rates won’t drop soon, so make sure you aren’t overextending yourself. “If you find the right property at a good price, then it is always the right time to buy with a long-term hold philosophy. In a Buyer’s Market, when the owner-occupied buyer is sitting on the side-lines, the investor has the upper hand to get into a property deal at terms that haven’t been seen for the past few years.

Second, the seller will be willing to “make a deal,” and you need to get the property at a good price. This will not only help offset the cost of those higher rates, but it’s also the one variable you can’t go back on. The strategy here; you have the option to renegotiate your mortgage rate if rates fall, but you can’t renegotiate the purchase price.

When shouldn’t you “marry the house, date the rate”?

Dating the rate isn’t a good idea if you’re in a particularly hot housing market. This likely means you’ll pay an inflated price for your home and compete against people buying their “dream home” to live in. This is not an investors’ market unless you’re looking for a quick flip. If you don’t plan to hold the property for a while, this strategy may not work for you. While refinancing can help you take advantage of lower rates later on, it does come with costs. When interest rates decrease, America Mortgages can easily give you a breakdown to see if/when refinancing makes sense.

Other ways to deal with higher mortgage rates

Rolling over for today’s high mortgage rates isn’t your only option if you want to buy a home in today’s market. For one, you can explore alternative mortgage products that America Mortgages offers. While rates on 30-year loans might be near 7%, there are numerous ways to offset the rate with creative loan programs.

Interest Only – service the interest at a fixed rate for 10 years. You will not be paying down the principal, but for savvy investors, this is an excellent way to maintain a positive yield.

40-year mortgage loans – yes, you read that correctly. America Mortgages now has fixed rate 40-year tenure. This is an excellent way to fix your rate over the long haul. You know exactly what that payment will be for the next 40 years; as rental prices increase, your payment will stay the same. Even if you don’t refinance, this is a fantastic way to see passive income with a long-term hold strategy.

The monthly payment for a amortization 30-year fixed mortgage (P/I) with a loan amount of $250,000 at an interest rate of 5.00% is $1,380. The monthly payment for a 40-year fixed, 10 year interest-only mortgage with the same loan amount of $250,000 at an interest rate of 7.5% is only $1,526. This is an increase of $146, a 10.5% increase.

When compared to the rising cost of rent, the increase in monthly mortgage payments is relatively minimal. The average rent for a two-bedroom apartment in a major U.S. city has increased by more than 40% in the past two years. This means creative financing even in a higher interest rate environment can actual improve rental yield overall.

Will mortgage rates go down soon?

There’s no way to tell for sure if mortgage rates will drop, but if history repeats itself, expect rates to be lower within the next 12 to 24 months. Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association (MBA) agree, too. MBA predicts the average rate on 30-year mortgages will fall below 5% (owner occupied) by the end of 2024, while Fannie Mae’s projection is a 5.9% average. NAR predicts a slightly higher 6% rate.

It all will depend on inflation and the Fed’s actions in response to it. If inflation stays high and the Fed continues to increase its benchmark rate, mortgage rates could increase even further. If inflation cools and the Fed stops its rate hikes or reduces its rate altogether, mortgage rates could fall. We expect the latter, especially going into the next Presidential election.

The bottom line

For now, mortgage rates are still higher than they were, but still historically low over a 20-year period.

While the “marry the property, date the rate” approach will work for some investors, it’s not the right move for everyone. Always talk to your America Mortgages professional or financial advisor if you’re unsure what is best for your finances. If you do opt for the “date the rate” strategy, make sure you view it with a long-term hold (5 years+). Though refinancing may be an option later on, there’s no guarantee rates will drop while you own the property.

Trust the experts

Unlike most banks and brokers that see one International Investor looking to obtain a mortgage a year, 100% of our clients are International Investors. Trust the experts in this industry to understand the complexities of Foreign National or U.S. Expat clients. For some, this is a rarity. For us, this is all we do! If you’d like information on loan programs or to schedule a call with one of our mortgage professionals, please use this convenient 24/7 calendar link.

www.americamortgages.com

How to Invest In Real Estate Amid High Interest Rates and Inflation

Post author By Premela R.
Post date August 18, 2023

Invest In Real Estate | Expat Home Loans

Investing in real estate when interest rates are rising can be a challenging decision. But if you know what you are doing, there is a world of opportunity.

When interest rates rise, finding profitable real estate deals may be difficult. What might be a fantastic deal when mortgage rates are low could potentially lose you money when mortgage rates are high. In times of high interest rates, people tend to panic, and novice investors or owner-occupied borrowers think the best idea is to wait it out and start investing when central banks pivot again.

But this approach means they miss out on some amazing deals and delay their investment goals. For those beginning their investment journey, it could mean never actually getting started. Are you aware that currently, 84% of Californians may be forced rent because it has become “unaffordable”? For sophisticated real estate investors, this means an opportunity to obtain the highest rent while also having the power to negotiate the purchase price of real estate. A perfect storm for savvy investors!

The key is to know how to invest in real estate in a high interest rate environment. This allows you to make the most of the situation and come out stronger. For those who know what they are doing, these times are great for finding amazing deals. If you know what you’re doing, these times can greatly increase your net worth.

There is a reason why this statement holds true through time:

“Money can be made in bull markets. Fortunes are made in bear markets.”

Use Interest Rates in Your Negotiations

When buying an investment property in America, many may be concerned about whether the deal will be profitable when interest rates are on the rise. There will also be worry about where interest rates could be in the future.

This may seem like a bad position to be in. But guess who else will share these worries? The seller and the realtor selling the property. Both the seller and realtor will be aware that fewer people can afford to buy their property. They’re also aware that if they don’t sell the property fast, interest rates could rise again.

In this current market, the experienced real estate investor will ensure interest rates are part of the conversation when negotiating. If one does this correctly, one could get an excellent deal with the right seller. This is particularly true if the property has been on the market for a while and the seller is motivated. If a seller waits too long when buyers are skittish, they may be waiting a very long time to sell the property. Use this market pressure to your advantage!

Getting a great deal is particularly important in these circumstances, as buying a property below market value will give you some leeway in volatile market conditions. It also puts you in a fantastic position when interest rates go back down, and property values rocket up.

Fixed-Rate Mortgages

Unique to the U.S. and one of the most valuable tools rental property investors have in the U.S. is the 30-year fixed-rate mortgage. Surprisingly, this style of mortgage is very much an outlier compared to what’s typically offered in other countries. Most countries tend to offer adjustable, variable, flexible, or renegotiable rate mortgages, all of which pose an inherent risk with the potential of an unexpected interest rate hike during the ownership of the property.

Rent Increases

As pointed out, a rental property’s projected cash flow is based on today’s rents, not tomorrow’s. Rents increase for two reasons: appreciation and inflation.

Guess what doesn’t increase over time and is not affected by appreciation or inflation? Your mortgage payment when you have a fixed-rate mortgage!

This means your cash flow spread will continue to grow over the life of your rental property as you continue to increase rents.

Your expenses, such as property tax and insurance, may increase over time, but they’re unlikely to increase at a rate anywhere near what rents will increase. Overall, you’ll see that rents will continue to pull farther and farther away from your fixed-rate mortgage expense, and your profits should continue to grow exponentially.

How a Rental Property Makes Money

Before learning about U.S. real estate investing, you may have known that rental properties in America can be much more profitable than you think with the right tools and partners.

The five ways that rental properties can make money are:

Cash flow
Appreciation
Tax benefits
Equity built via mortgage paydown
Hedging against inflation

When you understand the details of each profit centre, you will not only become savvier about the power of holding a rental property long-term instead of short-term, but you’ll also begin to realise that the expense of an interest rate that’s a couple of points higher than what you’re used to likely doesn’t hold a candle to the profit potential over the lifetime of the rental property.

You may already be saying, “But those other profit centres are speculative, and cash flow is still important, and the higher mortgage expense increases my risk by lowering my cash flow.” However, when dealing with this situation, your approach should focus on two essential factors:

Learn how to manage your various sources of income. If your available funds decrease due to a higher interest rate, explore other ways to make money. For instance, if you’re purchasing property in an area that’s improving and in high demand, you might expect its value to increase. Alternatively, if you’re investing when prices are rising a lot, how could you adapt? Visualise this like a chart with different bars representing each way you make money. If one bar goes down, are any of the other bars going up? If they’re all going down, that’s a concern.

When some bars are higher than usual, do those help to balance them out? It all depends on your specific situation.

Put a big focus on location and demand. Just like in the earlier example, a crucial factor is buying properties that can contribute to the “appreciation” part of your earnings, along with inflation and rental demand. When people really desire the properties they own, the chance for higher profits from these profit centres increases, and these profits will continue to grow consistently over time.

When you understand how rental properties make money, you can begin to wear the investor hat rather than the consumer hat. It’s the consumer mindset that often leads people to view increased interest rates as deal-breakers. However, those who genuinely understand how rental properties make money not only learn to look beyond the interest rates but also gain insights into how to compensate for it.

Find Cash-Flow Strategies

The traditional buy-to-let approach, while profitable when interest rates are low, might not be effective when rates are higher. Deals that used to bring in good cash flow with a low-rate interest-only mortgage could turn into situations where you break even or even lose money when rates are up. This means that traditional landlords and property investors miss out on many opportunities. This is where creative, informed, and forward-looking investors thrive. If you think outside the box, you gain a clear advantage in this kind of market.

An example of this is serviced accommodation. A property that might have generated low cash flow single-family buy-to-let can turn into a profitable short-stay let business. Renting it out on platforms like Airbnb can earn you much more than renting it out for the long term.

There is a broad range of clients for serviced accommodation, and it isn’t just holidaymakers. You don’t necessarily need to be in a vacation location as short-stay lets are used by everyone from contractors to re-locators. Simply find a location reasonably close to a chain hotel and check that the hotel is regularly fully booked.

Think Long Term

Property prices are volatile when interest rates are high. You should not be thinking about the cost of the property in short to medium term. If you have bought a high cash-flowing property, you should consider it a long-term hold. Don’t become overly concerned with month-to-month or even year-to-year price movements.

While past performance doesn’t guarantee future outcomes, real estate has historically been a reliable long-term investment. The global population continues to grow, and right now, there’s a shortage of at least 6.5 million properties in the U.S. Remember that in certain regions and cities, available housing space, especially in desirable areas, is limited. If you’re patient and able to wait out market fluctuations, there’s a strong chance you’ll reap significant rewards.

In conclusion, a high-interest rate environment can be a great time to buy an investment property, provided you’re well-informed. While the market might discourage other investors and property owners, you have the chance to uncover valuable opportunities. This means being creative, having the necessary experience, or having the willingness to gain the necessary knowledge to succeed in such a situation.

There is a world of opportunity for those willing to put in the time to learn and understand how to invest in real estate in times of rising rates. Many new millionaires and billionaires will be made in these times; it is up to you whether you will be one of them!

As a company America Mortgages has one focus, providing market rate mortgage financing for Foreign Nationals and U.S. Expats. This is all we do.

This is our expertise and no one does it better.

If you’re a sophisticated investor you will understand why working with experts in their field is so important. If you’re new to the U.S. real estate investor market, we welcome you to give America Mortgages the opportunity to work with you hand in hand to build your real estate portfolio in America. Getting approved for a mortgage is the first step. To arrange a convenient time to speak with a U.S. Mortgage Specialists in your time zone, please use this convenient calendar link.