U.S. Commercial Loan
The New AM Commercial + is just for you!

If you live outside the United States, finding appropriate financing options for U.S. commercial real estate is extremely challenging. Our team of commercial mortgage professionals understands the requirements of Foreign Nationals, U.S. Expat borrowers regardless of where they earn their income or U.S. credit profile. 

Presenting AM Commercial +! A commercial mortgage designed specifically for non-resident real estate investors. 

What’s the difference between a commercial mortgage and a residential mortgage?

A residential mortgage is a type of amortized loan in which the debt is repaid in regular installments over a period of time, normally 30 years. Unlike residential loans, the terms of commercial loans typically range from five years (or less) to 20 years, and the amortization period is often longer than the loan term. This gives the borrower the flexibility to qualify without the commitment for long-term financing. 

A commercial mortgage is intended for borrowers buying or releasing equity for a property that is used for a business. AM Commercial + loan programs have been used for borrowing against assets such as office buildings, industrial facilities, or multi-family properties. Need to expand to the U.S. and need a base to operate from? AM Commercial + has you covered! 

There are various reasons why refinancing with an AM Commercial + mortgage would be beneficial. Regardless of whether it’s an income-based or a pure asset-based mortgage, AM Commercial + has you covered.

Key Loan Highlights:

  • Minimum loan amount is $1,000,000 with no maximum
  • No U.S. credit required
  • Available in all 50 states
  • Interest-Servicing Only (Interest-Only) payments are also available
  • Each loan is bespoke and structured specifically to your requirements

*Indicative only. Rates and terms are subject to change

The quickest method for getting a U.S. Commercial Loan? AM Commercial +

America Mortgages’ quick and easy application is all you need to complete. Our team will tap into our extensive curated network of U.S. lenders to find the best commercial mortgage option for you. Commercial loans for Foreign Nationals and U.S. Expats can be funded quickly depending on the type of qualifications. Unlike commercial bank loans, our process is quick and straightforward. 

Ready to apply or want to find out more?

When you apply through America Mortgages, your mortgage specialist will assist you with gauging the advantages and expenses of your financing choices. Depending on your situation, we normally have more than one option for you to consider. 

America Mortgages has a dedicated U.S. Commercial Lending Team, based globally with a broad network of U.S. lending relationships, including major banks, regional banks, pension funds, and real estate lenders, to name a few. What makes America Mortgages different is that 100% of our clients live abroad. We understand this type of lending better than anyone in our industry. 

Learn all about AM Commercial + when you speak to our team. [email protected]

Stay tuned for next week’s article where we introduce AM Holiday/Airbnb Investor Program for Foreign Nationals & U.S. Expats! 

www.americamortgages.com

AM U.S. Expat Mortgage
Real Estate Investor Toolbox Introducing "AM U.S. Expat Mortgage +"

Are you a U.S. citizen living and working abroad? Have you tried to apply for a U.S. mortgage, and the person on the other end of the call thought Singapore was in China or the Netherlands and Holland are two different countries? Sigh. We understand.

America Mortgages ONLY focus is providing U.S. market rate mortgage loans for U.S. Expats and Foreign Nationals with the understanding, knowledge, and experience you require. 100% of our clients are just like you, and no one does it better!

So you’re a U.S. Expat living abroad. Why not qualify just as you would if you walked into a local bank back home in the U.S. with AM U.S. Expat Mortgage +.

I think the easiest way to explain AM U.S. Expat Mortgage + is with actual questions and answers we get from U.S. Expat;

1. I work for a foreign company in Paris, and I don’t receive a W2. America Mortgages does not require a W2, even for a conventional mortgage. As unique as that may be, it’s true.

2. I’ve been living outside of America for a decade and no longer have U.S. credit. This is more common than you may think. We have several enquiries a week where a U.S. citizen has been living abroad for many years and no longer has a U.S. credit footprint. For a “traditional” bank, this is a “no-go.” At America Mortgages, we have not just one but several loans you can qualify for using credit from a foreign country. In short, you do not need U.S. credit even as a U.S. citizen.

3. I haven’t filed my U.S. tax returns in many years. You’re not alone. There are various ways to qualify for a mortgage without using tax returns.

4. I retired and moved out of the U.S. and living in Thailand. I don’t have employment but would like to cash out of my property in the U.S. We see many retired real estate investors that have decided to spend their golden years on the beach in Mexico or the vineyards in Italy. We have several mortgage programs where you can qualify using ONLY the rental income of your property to qualify. No employment required.

5. I’m a U.S. citizen entrepreneur living in Ireland. My income is lumpy and unpredictable. Can I qualify for a U.S. mortgage? America Mortgages has a specific team that specializes in complicated tax returns or HNW borrowers. We understand how to calculate your true mortgage serviceability and present it in a way which banks can understand.

6. I live in Hong Kong. The last time I got a U.S. mortgage, I dealt with a bank in New York. I was up for weeks at 2 am trying to explain why Hong Kong doesn’t have a zip code. What makes you different? Besides knowing Hong Kong doesn’t have a zip code, we have experienced American loan officers living in Hong Kong. ? We have loan officers globally. No longer do you need to work around the bank’s hours. We do that for you. As a matter of fact, you don’t even need to leave your living room in Hong Kong to open and close your mortgage!

7. The U.S. Embassy is closed in Israel, and I can’t travel. How can I sign my mortgage documents? Very good question! Depending on your location, it may be impossible to get an appointment due to Covid restrictions. Not to worry, again, as 100% of our clients are living abroad, unlike U.S. banks or brokers, we understand this before it becomes a problem. We have at least four other ways to close your mortgage without signing at the U.S. Embassy. It’s easier than you may think.

AM U.S. Expat Mortgage + program highlights:

  • No W2 needed
  • U.S. credit score 640+ needed
  • Use Foreign Income to qualify
  • LTV 80% for U.S. Expat foreign earned income
  • Purchase, Cash-out, refinance

Documents required:

  • Two years of U.S. Tax returns (if you do not have U.S. tax returns, please let us know)
  • Two months bank statements (foreign okay)
  • One month of pay statements
  • U.S. Passport or driver’s license

America Mortgages has a wide range of mortgage products available for U.S. expats and Foreign Nationals looking to purchase or refinance U.S. real estate. Mortgages can be variable or fixed-rate, with flexibility over the fixed-rate term. In addition to the standard principle and interest U.S. mortgage loans, interest-only mortgages allow for more cash flow.

For more information on this program, please don’t hesitate to get in touch with our team at [email protected]. Stay tuned to our next week’s article, where we introduce AM Commercial +!

www.americamortgages.com

Can a UK citizen buy a house in the USA | US Home Loan

The only globally-based USA mortgage specialists, America Mortgages

Can a UK citizen buy a house in the USA?

With a mortgage from America Mortgages, any UK citizen can buy property in the United States.

The United States of America has no laws that specifically prevent non-citizens from buying or owning property in its states and territories, regardless of nationality. What was once limited to the ultra-rich and British rock stars has become more mainstream, with heaps of those living in the Home Islands grabbing their slice of the American Dream.

Our lending tiers start with residential units valued at a minimum property value of $200,000, with a minimum loan amount of $150,000 which is ideal for those seeking seasonal vacation units as a source of rental income. In addition, America Mortgages also offers commercial, portfolio, and bridge loans, all three of which require minimum loans of $1,000,000.

Can British Citizens Legally Buy Property in the USA?

Many UK citizens are surprised to learn that there are no citizenship or residency requirements preventing foreign nationals from purchasing real estate in the United States. British citizens can buy vacation homes, second homes, investment properties, and even commercial real estate without holding a U.S. Green Card or U.S. citizenship.

Property ownership does not automatically provide immigration benefits or residency rights, but it does allow foreign buyers to invest in and own U.S. real estate in the same way as many domestic purchasers. 

How UK Citizens Can Buy a House in the USA

UK citizens can buy residential, vacation, and investment property throughout the United States without becoming U.S. citizens or permanent residents. The process is similar to that followed by domestic buyers and typically involves selecting a property, arranging financing if needed, completing due diligence, and closing the transaction. Many British buyers purchase U.S. property remotely and may qualify for foreign national mortgage programs using UK income, assets, and bank statements.

Does Buying Property in the USA Give UK Citizens Residency?

Buying property in the US for UK citizens can be just one step, however, because owning property in the US does not grant residency rights. If you are not a permanent US resident, the length of your stay is legally limited to the duration of your visa. Still, making substantial investments in American real estate is one path to permanent residency, and by extension, full citizenship (via naturalization).

Buying Property in USA from UK: Step-by-Step Process

  1. Determine your budget and financing strategy.
  2. Select the property and market.
  3. Engage a U.S. real estate agent.
  4. Obtain mortgage pre-approval if financing is required.
  5. Make an offer and negotiate terms.
  6. Complete property inspections and due diligence.
  7. Transfer funds and close the transaction.
  8. Take ownership and establish property management arrangements if needed.

US Green Card for UK citizens via Property Ownership

For example, the EB-5 visa can grant one conditional permanent residency, or a US Green Card, by investing a minimum of $900,000 (at the time this article was published), and while this does not offer instant citizenship, it can expedite US residency that might eventually lead to full citizenship. Although owning real estate in the United States doesn’t qualify as an investment into an EB5 program, it can be a factor in consideration when or if you decide to apply for residency. Please confer with an EB5 attorney or advisor.

US Property Market for UK Citizens

As the United States transitions to a post-pandemic economy, its housing market has heated up for several reasons, including an increase in home offices and those with the financial means motivated by a Fear of Missing Out (FOMO). Unlike many other nations, however, UK citizens investing in US housing need to remember that it’s not a homogenous market: its 50 states and one federal district (Washington, D.C.) offer as much diversity within themselves as they do as a whole.

Best place to buy house in USA

For example, $10,000,000 can get you a massive 7-bedroom, 9-bath 10,000 square-foot ranch house on a large piece of pristine forested land in Colorado, but that same ten million dollars in New York City is the going price for a luxury 3,100 square foot apartment with three bedrooms and four bathrooms. But as mentioned above, UK citizens need not be in the top 1% of earners to purchase a home in the US, get in touch with us today to start your path to American property ownership.

Financing US Housing as a UK Citizen

America Mortgages provides comprehensive USA residential mortgage services for those living abroad, including UK citizens who wish to invest in US properties, as well as Foreign Nationals and American expats residing anywhere in the U.K. — England, Scotland, Wales, and Northern Ireland. Our global team of specialists is ready to help you. As America Mortgages only focus is very specific, we achieve approval on 97% of mortgages for US citizens and foreign nationals’ applications submitted through a vast network of the top 150 US lenders.

Sources: Portal Hud, British Expats

Can UK Citizens Get a U.S. Mortgage?

Yes. Many UK citizens finance their U.S. property purchases through foreign national mortgage programs.

Depending on the lender and property type, borrowers may be able to qualify using:

  • UK employment income
  • Self-employment income
  • Foreign bank statements
  • Investment income
  • Asset-based qualification methods

Many foreign national mortgage programs do not require U.S. tax returns, U.S. employment, or an established U.S. credit history.

What Documents Do UK Citizens Need to Buy a House in the USA?

Typical documentation may include:

  • Passport
  • Proof of address
  • Bank statements
  • Asset statements
  • Income verification
  • Property purchase contract

Documentation requirements vary depending on the financing structure and lender underwriting guidelines.

Popular U.S. Locations for UK Property Buyers

Many UK citizens purchase property in:

Florida

Popular for vacation homes, retirement properties, and rental investments.

Texas

Growing population, strong economy, and investment opportunities.

Arizona

Warm climate and retirement appeal.

New York

Often selected for investment and business-related purchases.

California

Popular among international investors seeking long-term appreciation.

FAQs

Q: Can a British person buy a house in America?

A: Yes. British citizens can legally purchase residential and investment property in the United States without becoming U.S. citizens or permanent residents.

Q: Can I buy a house in America if I live in the UK?

A: Yes. Many UK residents purchase U.S. real estate remotely and may qualify for foreign national mortgage programs depending on their financial profile and property type.

Q: Do I need a Green Card to buy property in the USA?

A: No. Property ownership does not require a Green Card, visa, or U.S. citizenship.

Q: Can UK citizens get a U.S. mortgage?

A: Yes. Many lenders offer foreign national mortgage programs designed specifically for international buyers, including UK citizens.

Real Estate Investor Investor Toolbox

A five part series on powerful mortgage tools for U.S. real estate investing for preferred clients.

America Mortgages presents this series as part of our never-ending mission to inform and educate the global real estate community about the investment prospects in U.S. residential real estate and the accessibility with which financing may be obtained. If you’re getting this email, you’re considered a preferred client of America Mortgages or Global Mortgage Group, thank you.

Over the last 2 years, we worked on sourcing mortgage programs for all investors regardless of their experience. With loan amounts as low as $150,000 and as high as $150,000,000 we are at the forefront of Foreign National and U.S. Expat mortgages.

Over the next 5 weeks, we will introduce a new weekly series; The Investor Toolbox for Preferred Clients. This will consist of 5 enhanced loan programs offered by America Mortgages. As with everything we do, these programs are laser focused for Foreign Nationals and U.S. Expats looking to invest in U.S. property market. In this next series, we will go over the various ways you can acquire U.S. real estate without the rigorous and often painful process “traditional” banks require.

The Real Estate Investor Toolbox Series:

  • · AM FN Investor +
  • · AM U.S. Expat Mortgages +
  • · AM Commercial +
  • · AM Holiday/Airbnb Investor Program
  • · AM No Income Required +

In the first article of the series, we introduce AM FN Investor +

AM FN Investor + allows borrowers to use a simplified form of income documentation to qualify rather than “traditional” income.

As a company, our only focus is providing market rate mortgage programs for Foreign Nationals. As we close U.S. mortgages for borrowers from Sydney to Shanghai, it is important to keep the documentation provided by the borrowers very simple and consistent.

Rather than going through years of complicated tax returns, pay statements, translations, and then having everything certified, we’ve realized that there is a much easier and straightforward way. America Mortgages has simplified the process to be very straightforward, and easy to obtain. We understand that many of our clients are entrepreneurs, self-employed or pure investors. Often these types of clients have difficulty qualifying for loans due to excessive writes offs, lumpy income or not being able to show their true ability to service debt. If you fall into one of these categories we will only require a letter from your accountant. This letter will state your last two years of income and current year to date. Fret not, you will no longer be seen as a “complicated or high-risk” borrower. As many have stated, it is truly the perfect loan for self-employed investors and entrepreneurs.

Are you employed but earning your income abroad? We understand you as well. Currency exchange, bonus income, deferred compensation, all these issues and more make for a complicated tax return for an underwriter in the U.S. that is used to looking at “Mr. and Mrs. Smith” simple two page tax returns. If you’re employed, all that is required is a letter from your employer with the employer’s letterhead. The letter, for which we have a template, will state last two years income and current YTD (year-to-date). Anything not in English will require a professional translation, but in general, yes, it’s that simple.

We should also mention that for both of these programs you do not need to have U.S. credit or a U.S. footprint. In lieu of U.S. credit, we can use a credit report from your home country or country of residence.

The income documents we require are very straightforward and easy for the borrowers to provide, making the underwriting approval process much quicker.

Normally, we can get an approval for your mortgage within 72 hours of submitting all documents. Following a successful mortgage approval on a purchase, we will issue a pre-approval letter which you can then use to go shopping! Once the loan is approved, if it’s an equity release or a refinance to a lower rate, we are able to start the process immediately and normally close the transaction within 30-45 days. .

This program is available in all 50 states regardless of your passport.

Are you more of a “seasoned” investor (like myself) in age? Don’t worry. In order to increase the yield, all loans are amortised over 30 years regardless of the borrower’s age. As a bonus, we also have a fixed 10 year interest servicing only option. As stated in the series, our goal is to give you the “tools” to invest in U.S. real estate.

If you’re sitting on the fence wondering if you should be investing in U.S. real estate, perhaps our last statement may make the decision easier… America Mortgages approves 97% of the loans submitted.

For more information on this Preferred Client mortgage program, please contact our team at [email protected]. Stay tuned to our next week’s article, where we introduce U.S. Expat mortgages as if you walked into a bank in the U.S.

www.americamortgages.com

Mortgages for U.S. Real Estate

With inexpensive funding and various tax advantages, everyone should take advantage of the benefits of a mortgage when investing in U.S. real estate regardless of the loan size. However, why do the wealthy often find it increasingly difficult to obtain mortgage financing without AUM?

With a portfolio of assets worth millions of dollars, one may assume that securing credit would be a straightforward task for a high net worth (HNW) individual. Unfortunately, the reality can be quite different especially if you’re a foreign national or U.S. Expat.

The unique nature of a HNW’s wealth – their income, investments, and liquidity – puts this group of people at a surprisingly high risk of being turned away by conventional banks unless they are willing to deposit a significant amount of funds for the bank to manage. This is certainly true in the mortgage market, and what’s more, it is an issue that has become more prevalent post-Covid.

American Mortgages has a dedicated HNW Team that focuses on mortgage solutions for foreign nationals and U.S. expatriate clients.

“As a company, our focus is finding solutions that go beyond what Private Banks can offer was the cornerstone of why this has been so successful. Our goal is to be a viable solutions provider and a trusted partner for the private banks and their clients. None of our loans require AUM, hence there are no funds taken away from their current investments or portfolio.”

– Robert Chadwick, co-founder of Global Mortgage Group and America Mortgages.

America Mortgages HNW mortgage loans have a multitude of options when it comes to qualifying for a large mortgage loans regardless of the passport you hold.

1. Asset Depletion – a surprisingly simple way to establish your income. AM Liquid Portfolio uses a unique view on “asset depletion” to qualify HNW clients using their investment portfolio without an encumbrance or pledge of assets. Essentially, all of your assets are entered into a calculation, and a final number is churned out. The final number is then used as the income to qualify. In most cases, as long as the income is sufficient, no other person’s income documentation is required. This makes an often complicated and tedious process simple, transparent, and painless.

2. Debt Service Coverage – When it comes to HNW borrowers, one of the most overlooked and misunderstood loan programs is debt service coverage. HNW borrowers tend to own multiple properties in various asset classes. If the property is used as a rental, then there may not be any requirement to go through the tedious process of providing and verifying personal income. Again, as HNW borrowers tend to have very complicated tax returns, this is a straightforward way to show the borrower’s debt serviceability.

Debt service coverage ratio– or DSCR – is a metric that measures the borrower’s ability to service or repay the annual debt service compared to the amount of net operating income (NOI) the property generates. DSCR indicates whether a property is generating enough income to pay the mortgage. For real estate investors, lenders use the debt service coverage ratio as a measurement to determine the maximum loan amount.

3. Bridge/Asset Based Lending – With Covid still in play, it’s not uncommon for investors to experience a temporary liquidity event. Rather than selling their property, they are using their real estate to release equity. Asset-based lending is an option for both residential (non-owner-occupied) and commercial properties.

Simply stated, HNW bridge loans are used for residential and commercial investment property when more traditional institutional financing sources may not be available. Due to temporary liquidity, many borrowers have capital needs that traditional sources often can’t meet. For example, a borrower purchases property out of bankruptcy or foreclosure and needs to close quickly “same as cash” before long term financing can be arrange.

4. Simplified Income – HNW borrowers often have personal and business tax returns, which are complicated. The complexity of these returns often turns into an administrative nightmare for the borrower when dealing with a mortgage lender. What makes America Mortgages unique is the fact that 100% of our clients are living and working outside of the U.S. We are dealing with HNW clients from Shanghai to Sydney. Simply put, translations and understanding tax codes, deductions, net income, etc., is painful.

America Mortgages HNW Simplified Income documentation is just that. We do not require years or, in some cases, decades of tax returns, P&L, A&L, bank statements, etc. We take an often complicated process and simplify it; 1. If you’re self-employed, we will request a letter from your accountant stating the last two years’ income and current YTD. 2. If you’re employed, then a letter from your employer on company letterhead stating your last two years’ income and current YTD is sufficient. Yes, it’s that simple and painless.

As 100% of our clients are either Foreign Nationals or U.S. Expats, we understand the intricacies and complexities of this type of lending for our borrowers. It’s as simple as that. Our HNW loan programs are structured to meet our client’s requirements. Providing competitive pricing with the assurance that your loan will close is our only focus, and no one does it better.

[email protected]

www.americamortgages.com

Group of successful business people
Portrait of group of successful businesspeople happy at work

What is AM Portfolio+?

The America Mortgages’ Portfolio+ program is a streamlined debt service coverage mortgage loan over multiple residential investment properties. It is one loan with blanket collateral over a minimum of 2 properties and up to 100+. Similar to our AMIRM program announced last week, AM Portfolio+ does not require any personal income documents from the borrower; the underwriting is solely based on the appraised value of the properties and the cash flow generated from the lease agreements.

Residential real estate has had an incredible run in both price appreciation and rent appreciation in recent history. We have heard from several clients over the last few months how great their rental portfolio in the U.S. has done in both areas. Though this is very true, there is one point that always stands out – where has your ROE gone?

Return on Equity (ROE) is a common measurement used by real estate investors to determine how strong of an investment their properties are. With the strong price appreciation over the last several years, our clients have seen massive growth in their portfolio values. Though rental rates have increased, they aren’t keeping up with the price appreciations, leading to investors having much more equity trapped in their portfolios and a reduced ROE. In the past, the solution for this was always to sell the properties and buy bigger/better cash-flowing properties – this is where AM Portfolio+ comes in.

Investors can use AM Portfolio+ to release that trapped equity and redeploy it into other real estate or investment projects. This new increased leverage on the portfolio has allowed investors to bring their equity position back in line to support a more robust ROE and provide them the cash to deploy into other properties or projects.

Key Highlights for AM Portfolio+

  • • One loan over a portfolio of residential homes
  • • No personal income documentation required
  • • Terms ranging from 5 – 30 years
  • • Rates starting in the high 3s
  • • Streamlined underwriting approach
  • • Refinance/Purchase/Cash out

With rates at an all-time low and AM Portfolio+ available across the U.S., there is no longer a need to sell properties that aren’t providing the ROE they once were.

Release the equity with our streamlined underwriting approach and redeploy that cash into other areas. Call us today to discuss your scenarios.

[email protected]

www.americamortgages.com

America Mortgages’ Investor Rental

“Traditional” banks will require income documents before approving a real estate mortgage. You will need to qualify based on your declared income using tax returns, less your monthly debt servicing. That is fine for a “traditional” investor; however, at America Mortgages, we deal with various real estate investors, and 100% of them live and work outside of the U.S – “traditional” is definitely not our type of clients.

Last week’s launchpad article talked about using your asset portfolio income to qualify for a U.S. mortgage. This week, we introduce our newest mortgage program, The America Mortgages’ Investor Rental Mortgage (AMIRM)!

What is AMIRM?

The America Mortgages’ Investor Rental Mortgage (AMIRM) is a debt service coverage mortgage (DSCR) that uses the borrower’s capacity to service or repay the yearly debt payment to the amount of net operating income (NOI) generated by the property. Lenders use the debt servicing coverage in the underwriting process. By using AMIRM, an investor may qualify for a property purchase or refinance using strictly the rental income. AMIRM does not require the borrower to provide any personal income documents, making the process quick, simple and very straightforward. If the monthly rental income (projected or current) covers the monthly mortgage payment and the incidentals such as tax, insurance, and monthly maintenance fee then the loan “debt services” and should be approved. It’s that simple!

Important takeaways of AMIRM:

  • The debt payment coverage ratio (DSCR) shows how much net cash flow is available to pay the mortgage, typically it is a 1:1 coverage.
  • When examining rental property performance, both real estate investors and lenders utilize the DSCR.
  • Possible to qualify on interest-servicing only.
  • The DSCR might fluctuate yearly, but the approval will be based on the current/project rental income.

The AMIRM determines whether or not a property generates enough revenue to cover the mortgage payments. When a real estate investor applies for a new loan or refinances an existing mortgage, lenders utilize the debt service coverage ratio as one of several factors to determine the maximum loan amount.

The greater the DSCR ratio, the higher the net operating income available to service the debt.

DSCR Formula

  • Debt Service Coverage Ratio = Net Operating Income / Debt Service

For instance, if a rental property generates $6,600 in rent monthly and the monthly mortgage payment is $6,600 (principal and interest), the debt service coverage ratio would be:

  • DSCR = NOI / Debt Service
  • $79,200 Annual NOI / $79,200 Annual Debt Service = 1:1

A DSCR of 1:1 indicates the property makes sufficient income to service the monthly debt.

While there is no industry standard for a substantial debt service coverage ratio in real estate, many lenders and real estate investors will strive for at least a 1:1 coverage. This indicates that, at the very least, the asset covers the minimal amount to service all debt payments.

While the debt service coverage ratio isn’t the only metric assessed when obtaining an AMIRM loan, it is an essential part of the approval process.

Why should you use AMIRM?

Self-employed borrowers often have complicated tax returns or income statements. Instead of a long-drawn-out dissection of your income, you can now simply qualify off the rental income. Period. We won’t ask for tax returns, pay statements, etc. If the property qualifies, the loan is normally approved. If you currently own U.S. property with positive cash flow but are concerned your personal income won’t allow you to release equity or apply for a lower rate, you can now qualify for a loan with your rental income! What better time than now to refinance your property? If these reasons have yet to convince you, here are a few more:

  • Applying for a new loan? Qualify for a higher-yielding property using AMIRM.
  • Investing in Commercial Property? Qualify with AMIRM.
  • Identify profitable rental properties based on rental income. Qualify with AMIRM.

If you’re interested in learning more about AMIRM, speak to one of our professional America Mortgages’ loan officers or email us at [email protected]

www.americamortgages.com

AM's Liquid Portfolio Mortgages
All you need to know about AM's Liquid Portfolio Mortgages!

Heard of the term “asset rich but cash poor”? 

It’s a common issue among entrepreneurs “working for equity” or high net worth investors who report low income but have sizeable real estate portfolios.

Traditional banks require pay stubs, employment letters, and credit scores (we have fantastic programs for this as well), but many of us are not in the corporate world and require more flexible programs to suit the needs of this new emerging investor demographic.

This week we “launch” our new Asset Depletion program for investors who own a collection of real estate assets and use the income from the portfolio to qualify as opposed to using your employment income.

Genius! 

Asset depletion, or ‘asset dissipation,’ is a way to qualify for a loan using substantial assets instead of income from employment. There is no AUM (Assets Under Management) or encumbrance of your portfolio at all, rather, it is simply used to qualify for a loan.

With an AM’s Liquid Portfolio Mortgage, we calculate your monthly ‘income’ by dividing your total liquid assets by the duration of most mortgage loans, 360 months.

This way, you can prove your ability to service the debt without regular income from employment – great for entrepreneurs!

You do not have to qualify solely based on your assets to use funds from asset depletion. You may use it as an additional ‘income’ source on top of any regular income you currently receive.

That said, borrowers who use an asset depletion program to qualify do not need to show any other sources of income or employment. If their assets are sufficient to service the mortgage – as well as regular living expenses – they can qualify based solely on that calculation.

What makes this program an excellent option for HNW clients is the mortgage borrower is not required to cash in their portfolio or encumber in any manner. The assets are only used to demonstrate an ability to make the mortgage payments.

  • Checking or savings accounts (bank must have a U.S. presence)
  • Money market accounts (bank must have a U.S. presence)
  • Certificates of Deposit (CD) (bank must have a U.S. presence)
  • Investment accounts such as stocks, bonds, and mutual funds (bank must have a U.S. presence)
  • Retirement accounts (bank must have a U.S. presence)

Asset depletion mortgage example:

Take for instance, a 59-year-old mortgage borrower has $3,500,000 in liquid assets, and another $300,000 in retirement or investment accounts.

This is how their monthly income will be calculated:

  • Retirement account – 70% of $300,000 = $210,000
  • Total assets counted – $3,500,000 + $210,000 = $3,710,000
  • Monthly income – $3,710,000 / 360= $10,305

In this case, America Mortgages will calculate the borrower’s maximum mortgage payment based on a monthly ‘income’ of $10,305.

Should you use an AM’s Liquid Portfolio Mortgage?

If you are wondering whether you are a good candidate for an asset depletion program, try answering these questions:

  • Are you retired with little to no fixed income?
  • Are you self-employed but with little to no “provable” income?
  • Are your assets held in a bank with a U.S. branch or presence?
  • Do you have Trust assets with completely unrestricted use?

If you answered YES to any of these questions, an asset depletion loan is an ideal solution for you.

For more information on AM’s Liquid Portfolio Mortgage, get in touch with us via email at [email protected]

www.americamortgages.com

AM Bridge Loans - Financing Solutions

In this edition of the Launchpad Series – we introduce the most widely-used tool for property investors at the moment, A Bridge Loan – often considered the “Swiss Army Knife” of financing solutions.

What are bridge loans?

A bridge loan is a type of asset-based, short-term loan, typically taken out for a few months to a couple of years pending the arrangement of longer-term financing or an exit, such as the sale. It is used to ‘bridge’ the gap during times when financing is critical but not readily available.

Bridge loans let homebuyers take out a mortgage against their current home to make the down payment on their new home. A bridge loan may also be a suitable choice for you if you want to purchase a new home before your current house has sold. This financing structure may also be beneficial to businesses that need to cover operating costs while waiting for long-term funding.

Introducing AM Bridge!

AM Bridge – A liquidity tool once reserved for the wealthy is now available for everyone!

Real Estate investors are often asset rich but cash poor. On paper, their net worth may be significant, but their wealth can be tied up in real estate or other businesses. Accessing such funds might mean sacrificing a stake in their business or surrendering some influence over its future – neither of which may be appealing.

It is not always the case that a real estate investor has a few hundred thousand dollars just sitting in the bank readily available to fund a property immediately. Even if they do, they may not wish to tie all their cash upon one property. In today’s market, the property that investors want could be in high demand and needs to be acted on quickly; these could be higher-yielding investments that need immediate funding. Having access to large sums of cash quickly and easily is what HNW investors have had at their disposal for decades. America Mortgages has now made this powerful liquidity tool available to everyone.

How is it used?

Here are some popular uses of “Bridging” Loans:

– Filling the contingency sale of an old property before you can purchase the new property. You can take a Bridge Loan and use your old house as collateral for the loan. The proceeds can then be used to pay a down payment for the new house and cover the costs of the loan. In most cases, the lender will offer a bridge loan worth approximately 80% of both houses’ combined value.

– To purchase based on the asset value of the new build so the borrower can meet the final payment before delivery.

– For the initial purchase until entitlement or for refinancing after a cash purchase until entitlement.

– To purchase greenfield land to begin commercial development. Once certain stages of development have been completed, it’s easier to obtain traditional bank financing.

– Cash-out Bridge Loan for short term personal or business use.

The Market

The pandemic has created a boom in the bridge loan market in several ways.

Firstly, it has created an economic environment filled with uncertainties, and as a result, more businesses need capital as soon as possible and can’t afford to wait for a traditional loan. They will thus turn to bridge loans.

Secondly, with the threat of the Delta variant and the increased number of companies delaying return-to-office plans, many are looking for new homes in more spacious areas. However, with how hot the property market is – data from Zillow show that houses are currently on the market for an average of 6 days only. Hence, it is critical for buyers to purchase their house as soon as possible to avoid disappointment. But, they may not have sold their old house yet and do not have enough money for this new house, which is why a bridge loan would be extra helpful.

Thirdly, there has been an accelerated trend of people migrating to Sunbelt cities due to greater job opportunities. This has driven up rents in these cities – the Phoenix area had the biggest rent increase in July, up 17% from a year ago. Due to the profitability of the rental trade, more developers and businesses are looking to acquire multifamily rental units. Short-term commercial bridge loans will provide them with the needed flexibility to take on such assets while they look for permanent financing options. This will help businesses get their assets to perform at maximum potential.

The Problem

When an American Mortgage bridge loan specialist gets a request for short term financing, they ask three things;

1. Where is the asset?

2. What is the value and the outstanding debt?

3. What situation are you trying to solve?

Number 3 is the most crucial and often the hardest to rationalize. Even the wealthiest people have used short-term bridge financing to access liquidity even when “conventional” options are still possible. This is mainly due to the time and effort required to obtain long-term financing. Cash-flow, credit issues, or asset use may prohibit a “conventional” bank loan. When time is a factor in a transaction, it is important to see the opportunity cost in not closing quickly or obtaining a simplified equity release.

Our Solution

Typically, the timeline for traditional bank loan processing from origination to closing is longer than most borrowers prefer for a time-sensitive funding solution or if the project lacks sufficient stable cash flow. The short-term nature of bridge loans generally allows alternative lenders to provide an approval decision and funding with greater speed than a more traditional lender. At America Mortgages, we’ve funded loans in as little as a couple of days since the initial contact.

To allow for such a speedy funding process, the sponsor’s expected property value and experience to execute the business plan are the determining factors in the decision-making process. For this reason, the loans are commonly non-recourse, which is another benefit to the borrower.

Bridge loans are often the preferred funding option for uses such as:

– Highly structured transactions

– Discounted note payoffs

– Lease-up stabilization

– 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)

– Recapitalizations/Debt Restructuring or Partner Buyouts

– Other uses on a case-by-case basis depending on borrowers specific funding needs, where traditional funding sources like banks or insurance companies will have a hard time approving such loan requests.

– Lending to foreign nationals with a “same-as-cash” basis

Short-Term vs Long-Term

Unlike short-term financing, longer-term financing is susceptible to the regulatory hurdles associated with securing long-term fixed-rate mortgages. This is why bridge loans are often provided by unregulated lenders, family offices, or in some cases, HNW investors. In addition to the regulatory scrutiny, banks or insurance companies require, the sponsor’s credit history and financial strength also take a front seat in the credit decision for long-term loans. Keep in mind, America Mortgages will never work with “lend-to-own” investors and lenders. Our goal is to find you a solution that works with your situation with a long-term solution and exit from the bridge loan.

While bridge loans are the preferred option for many specific financing needs, several downsides come with short-term financing that is meant to fund projects. When assets need work, lenders will consider these higher risks and, therefore, charge higher interest rates.

Additionally, bridge lenders generally do not exceed 70%-85% of the property cost basis to limit their financial exposure. However, this leverage is higher than traditional lenders would advance for the same project. This is because bridge lenders rely on the sponsor to fix the issues, which made the property ineligible for long-term financing in the first place. This enables the asset to become stabilized and ready for exit through a sale or by refinancing the property through traditional channels.

There’s no denying a bridge loan can be convenient if you’re prepared for a change but don’t want to risk a contingent offer. A bridge loan can also be an excellent way to finance a new house if you need to relocate for a job. For more information on AM Bridge, please connect with us via email at [email protected]

www.americamortgages.com