U.S. Expats Takes Advantage Of Lower Rates To Increase Rental Yield On Summer Home.

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The Client

A U.S. Expat living in Hong Kong working in the IT field. He wanted to refinance his 4-bedroom Tempe, Arizona home, which used to be the family’s residence and is now used as a short-term rental so the family can use it over the summer school holidays.

How We Helped

The client was working for a global company. He was currently on his U.S. tax filings, but his income was foreign-earned, no “normal” payslip, no U.S. bank account, and no W2.

Once we had all the required documentation settled, we packaged the loan and shopped for the best rate and terms. Our mortgage specialists helped the client structure several letters of explanation regarding how his income was calculated and the use of the rental property (Airbnb).

A formal mortgage offer was received within ten working days and closed shortly after that. The client was able to lower his current interest rate by a full percent on a 30-year fixed savings of thousands of dollars in long-term financing costs.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.S. Citizen$560,000$448,00080%2.375%
TermAddressProperty TypePurposeLoan Type
15 year fixedTempe, ArizonaSingle-Family HomeRefinanceResidential

Buying a new home? Why a ‘Pre-approval’ can help you with your search.

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A pre-approval denotes an official letter from the mortgage lender outlining the maximum mortgage amount they are willing to lend you. It’s not a commitment but only a rough estimate of the loan that you may borrow from that organization, the possible interest rate, and the monthly installment figure.

You can get the pre-approval document by filling up a loan application. The lender will ask you to submit some paperwork, including pay stubs, credit check, bank account statements, tax returns, and W-2 statements. An officer will look into the information provided and give you a written statement detailing the mortgage amount you are qualified to borrow.

A pre-approval does not guarantee the approval of a loan. It just means that the lending company has looked into your assets and other aspects of finances and chalked out the sum of a loan against that credit history.

At America Mortgages, we approve over 97% of all applications. Some of our loan programs don’t even require verifying the applicant’s income! Mortgage pre-approvals have an expiry duration, ranging between 30 and 90 days, depending on the lending company. Meaning, you will need to find a home and apply for the loan within that expiry window. Upon the pre-approval document’s expiration, you will need to apply for a new one that may affect your credit score a bit.

A pre-approval solidifies your financial stability and seriousness to the house seller. You can stand ahead of other potential buyers in a competitive market. This will particularly help first-time homebuyers to convince the seller that they are ready to put in an offer. Some people confuse between pre-approval and prequalification. However, the latter does not have much credibility since it does not involve a thorough investigation into your incomes and credit score.

Family Office in Asia purchases Multi-Family residential building in San Francisco.

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The Client

A Family Office based in Singapore has been actively shopping for yielding assets in the U.S. Given the recent weakness in San Francisco, the Family Office bought the building at 27% below the peak of 2019.

How We Helped

The borrower was an overseas company with no U.S. footprint and could not find any lenders willing to underwrite the loan. The lead came from a private bank that referred us to the client.

High Net Worth investors require a level of sophistication and professionalism which is why so many private banks are comfortable with us handling their clients.

We were able to secure a 5-year term with 25-year amortization with one of our lending partners that underwrote solely to the stabilized property. The borrower will now be able to generate a U.S. net worth which will open up further financing options for their next property.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
Singapore registered
corporate entity		6,200,0002,790,00045%5.875%
TermAddressProperty TypeLoan TypeHome use
5 yearsSan Francisco,
California		Multi-Family BuildingPurchaseCommercial

U.S. Expats private banker in Hong Kong purchases second home in South Carolina.

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The Client

An existing client referred this client, and he reached out to us to enquire about our U.S. citizen mortgage programs as he thought we only offer Foreign National mortgages.

How We Helped

How surprised he was to hear that U.S. Expat loans are half of our business. Since we are Expats ourselves, we know the exact issues our clients face and have a roadmap on dealing with them – Non-U.S. income, weak FICO score, and so on.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.S. Citizen$1,280,000$550,00043%2.75%
TermStateProperty TypePurposeLoan Type
30 year fixedCharleston, South CarolinaSingle-Family HomePurchaseResidential

How Do You Document Your Income?

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A documentation loan is any loan that requires full information substantiating a borrower’s claims of income and assets to gain financing. The vast majority of loans are documentation loans. Lenders use the documents provided during the underwriting process to ensure the application for financing is accurate and further determine a loan’s contract’s terms. “No doc” loans, in contrast, require no verification. No doc loans are also known as “high risk” loans, and they may even violate standard lending principles. Therefore, it is best to attain a documentation loan when possible by providing necessary loan information.

Income Verification

The first thing you will need to supply a lender to prove you can afford a loan is the verification of your income. There are several ways to verify income, and each lender may have specific requirements. One option that works for most lenders is supplying at least two years of tax information. For example, submit copies of the past two years’ worth of W-2 statements, which record your official income. If you are self-employed, you will need to supply Schedule C statements instead.

Lenders may also accept paycheck stubs or verification of income from your employer. However, many lenders would like to see that you have been earning an income equal to your current level for at least two years. The best scenario is to show continued employment for two years with the same employer with an increasing income.

Asset Verification

Lenders will consider your assets when reviewing your full financial strength. Not all lenders need to know your “net worth” to extend your loan. However, if you are placing any collateral down on a loan, you will need to verify the value of that collateral through full documentation. For example, if you take out a home equity loan, the lender may require an up-to-date home appraisal and a statement from your primary lender. The primary lender’s statement will reflect how much equity you have earned in the home through paying down your mortgage. This tells the second lender just how much it can expect to recover if you were ever to default on the loan and the lender needed to seize your asset.

Liens and Liabilities

Lenders cannot count your assets alone in order to determine your financial stability. Your debts, liens, and liabilities will also be taken into account. For example, when you apply for a mortgage, your mortgage lender will need to know if you also owe money to a student loan lender and a car loan lender.

This can affect your ability to afford a new loan based on your current income. Liabilities can be found through a simple credit check. Your credit report will reflect all of your debts and liens against your property. A credit check is completed without any documentation from you. All you will need to supply is your Social Security, Tax Payer Identification, or Credit Report number. The lender will carry out the credit check with your approval.

Low or No Documentation Loan

A low or no documentation loan requires very little verification of the claims made on an application. Documentation loans require a borrower to submit proof of income, proof of assets, and other documents before having a loan move through the underwriting process. A no or low documentation loan requires none of these items. Instead, the borrower must place only enough money as a down payment (30% min) to receive the loan. In exchange for the relative ease of the lending process, the borrower may have to accept higher interest rates and financing charges as well as a lower loan-to-value ratio on an asset.

America Mortgages specialize in Non-U.S. Citizens and Expats looking to purchase or refinance U.S. Real Estate. All the programs listed above may be available depending on your situation. With over 11 languages/dialects and representation throughout Asia, Australia, and Europe, one of our experienced professionals will be able to find the right loan for your borrowing ability.

For more information, please contact [email protected].

Northern California Multi-Unit Rental Property Purchase With A Complex Income Structure.

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The Client

A self-employed real estate investor with a British passport living in Hong Kong. He owned and managed a small boutique investment firm and wanted to diversify his holding in U.S. real estate.

How We Helped

A self-employed real estate investor with a British passport living in Hong Kong. He owned and managed a small boutique investment firm and wanted to diversify his holding in U.S. real estate.

The client needed to raise capital to purchase the three-unit property. To raise the money, the client wanted to refinance/cash out their existing 4 bedroom beachfront rental property lowering their current rate for a 5 year ARM, which was maturing in 6 months and get into a lower rate fixed mortgage.

The main challenge we had with this case was that the client had a complicated income stream. The business’s income was extremely “lumpy,” and although the total earned income was high, the consistency was sporadic. This made the accounts challenging to interpret and, in turn, created a three month dragged out mortgage experience with a well-known international bank for it to be declined eventually.

Although the clients’ business was very niche in his field, he had been running this successful firm for over a decade with an exceedingly good accounts track record. We were able to highlight the stable business history to the lender and structure the income documentation clearly and precisely to satisfy the lender. The lender subsequently released the equity portion from their other property and approved the loan on their new purchase.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.K. Citizen$950,000$475,00050%4.875%
TermAddressProperty TypePurposeLoan Type
5/1 ARMSeattle, WashingtonSingle-Family HomeRefinanceResidential

Amortization – How to choose between 10 or 30 year options?

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When you acquire a mortgage, the lender divides the repayment schedule into several monthly installments over a fixed period. Amortization is the process of spreading out the mortgage over multiple years and into a series of fixed payments. The total mortgage amount, including the principal balance and interest, is supposed to be paid off with the last installment.

As a borrower of an amortized mortgage, you need to repay a specified monthly amount that pays off a portion of both the principal and interest. After every installment, the total loan balance decreases and finally gets paid off with the last payment.

For example, if you obtain a $20,000 amortized mortgage for five years, the lender will divide it into 60 monthly installments, including the principal and the interest amounts. Presume you need to pay approximately $377 per month and respectively $294 and $83 go into squaring off the principal and interest. Then, it will be $295 and $82 respectively in the next month. Over the loan term, the amount of principal payment will increase, and the interest will decrease (although the monthly installment will be the same).

At America Mortgages, you can enjoy an amortization period longer than the mortgage term in the case of commercial loans. For instance, if you take a loan for ten years, the amortization period could be 30 years meaning the monthly installment amount will be similar to a 30-year loan.

If you are to repay this amount over 120 months at $1,000 per installment, the rate will continue for 119 months. In the last month, you will pay the remaining balance ($81,000 in this case) by one balloon payment.

Amortization is available on fixed-rate mortgages and home equity, personal, and auto loans. You won’t get this facility on credit cards and interest-only loans.

Definition of ‘Assets’ on Loan Application Form 1003

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Assets refer to a wide variety of items you own that have a monetary value. When you apply for a mortgage, the lender looks into your asset inventory and determines their cash value to make sure that you are capable of returning the loan despite facing financial hardship, such as a job loss, during the repayment period.

There could be various asset types, including:
● Money, savings and checking accounts, certificates of deposit (CDs), and other similar sources — cash and equivalent to cash
● Tradable stocks, bonds, or something that can be converted to cash without dropping their actual price — liquid assets
● Lands, vehicles, antiques, business property, and anything that has monetary value but cannot be converted into cash quickly and may lose some of their value in the conversion process — fixed assets
● Investment money that is lent for interest, including government bonds, securities, and any type of investment money that yields interest — fixed-income assets
● IRA, 401(k) accounts, mutual funds, or anything that secures your ownership in a company — equity assets

You can also categorize them into tangible (physical) and intangible (nonphysical) assets. The lender assesses your positive net worth, indicating your assets have more value than your liabilities. It also helps establish your debt-to-income ratio.

To do the required evaluations, America Mortgages requires only an International Credit Report, Accountant Reference, and some paper documents verifying your funds.

Advantages Of Investment Mortgage Loans Over Cash Purchases

Investment Mortgage Loans

As a U.S. real estate investor, investment mortgage loans can be very beneficial to you. America Mortgages focuses specifically on these types of mortgage loans. There are several programs on hand that make it possible for borrowers to get a mortgage to invest in real estate.

Some of them are better than others, but they can all help you out in some way. If you are considering getting a mortgage, here are a few advantages that you can get from an investment mortgage loan.

Advantages

Use other people’s money – The biggest advantage of using investment mortgage loans is that you get to use other people’s money. Many financial experts have said that you should use other people’s money whenever you can. When you get a mortgage, you only have to put up a certain percentage of the property’s money, but you still get to benefit from owning the whole property. You get to take advantage of the property’s appreciation, and you get to use it for whatever you want. This allows you to hang on to your capital and use it for other investments.

Reasonable interest: With most mortgages, you will be able to get a very affordable interest rate as long with or without a U.S. credit score (FICO). When you get a low-interest rate like you can with an investment mortgage, it can save you a substantial amount of money. For the cost of the loan, it is usually well worth it to get a mortgage instead of using your funds. Hang on to your cash and use it towards additional investments.

Easy approval: 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.

Not a U.S. citizen, Foreign National, or considering relocating abroad for work or school? We can help. Our Foreign National / Non-U.S. citizen mortgage loans were created for these situations. Qualify with No U.S. credit. No U.S. residency. No income verification. It’s not simple, but we have it down to a science with our expertise in this market. You will know where you stand and if you will qualify within a reasonable amount of time.

Increase your reach: With the use of investment mortgages, you can increase your investment power. As you grow, you can keep buying more and more property. In Asia, where property prices have increased, and square footage and yield have decreased, finding an affordable investment outside your home country makes sense. Many people would not be able to purchase property otherwise as it usually takes a significant investment. You can keep picking up more and more stuff as you go.

Build your net worth: Hong Kong, Singapore, Shanghai, and other large Asian cities have cooling measures to stabilize a fast appreciating Real Estate market mainly due to outside investment and the lack of affordable Real Estate options. Being able to build your net worth on a global scale gives with a reasonable mortgage loan that eventually you will have all of the property paid off gives you the same opportunity as anyone else regardless of your passport. You are free to do what you want with all of the property. If you had to rely on your funds for all of this, much of it would not be possible.

The Verdict

Using an investment mortgage can be a great way to get involved in the real estate investment market. Many people have gained considerable amounts of wealth through the use of real estate investment. Therefore, if you are considering getting involved in the field, you should definitely take advantage of investment mortgages. The advantages that you will receive as a result of using them will help you in a number of ways. If you can qualify for one, it makes a lot of sense financially. America Mortgages’ primary focus is helping non-U.S. citizens and Expats obtain prime, quality investment mortgage loans not only in the United States but on a global scale.

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For more information on U.S. or mortgage loans in other countries, please contact us via our 24/7 link.

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