Q&A: U.S. Housing Market Masterclass – Strategies for Rate Reductions & Market Outlook

During our latest webinar, “U.S. Housing Market Masterclass – Strategies for Rate Reductions & Market Outlook,” hosted by America Mortgages’ CEO Robert Chadwick (RC) and co-founder of global mortgage group, Donald Klip (DK), attendees gained valuable insights into navigating the U.S. property market and optimizing financing opportunities. For those who couldn’t attend, the recording is now accessible here.

Robert Chadwick and Donald Klip addressed a range of inquiries, providing insightful responses tailored to assist investors in making informed decisions, with remarks edited for clarity and brevity.

Q: Should I wait until interest rates get lower or buy now?

DK: Don’t wait for rates to drop. Even if they do, property prices are likely to rise. As we like to say, “marry the property and you date the rate.” It’s better to buy now and consider refinancing later if needed.

RC: Exactly. In the current market, it’s wise to act now rather than wait for rates to decrease. As investors with diverse portfolios are already seizing opportunities, it’s crucial to secure your property before prices surge further. Remember, you marry the property and you date the rate.

Q: In your opinion, which areas are great for buying now?

DK: The answer depends on your investment goals and preferences. Detroit, for example, offers high rental yields, while southern states like Texas and Georgia have relatively lower property prices.

Q: Any risks of waiting for rates to drop?

RC: The main risk is potentially paying a higher price for a property due to increased competition when rates eventually drop. It’s crucial to weigh this risk against potential savings on interest.

Q: Are there age restrictions for retirees applying for a mortgage?

DK: The U.S. generally doesn’t have age restrictions for retirees applying for mortgages. Lenders focus more on income, credit history, and property value.

Q: What are the four different ways of closing on the property?

DK: Closing methods vary but may include visiting the U.S. embassy, using remote online notaries, arranging power of attorney, or physically signing in the U.S..

Q: Does being an expat without a W2 affect mortgage rates & terms?

DK: Expats without W2s can still qualify for mortgages, as we assess their eligibility based on other factors like income sources and creditworthiness.

Q: What’s the maximum LTV for foreign investors? Is it income dependent?

DK: The maximum loan-to-value (LTV) ratio is typically 75% for foreign investors, and it’s generally not solely income-dependent, as rental income can also be considered.

Q: How can I qualify to purchase a property for my daughter attending school in the U.S.?

RC: You could qualify based on rental income from the property, even if your daughter resides there. Lenders assess the property’s income potential rather than personal residency.

Q: Are you able to connect foreign investors with local realtors and a support network?

DK: Absolutely. We can facilitate connections with trusted realtors, accountants, property managers, and other professionals to support foreign investors in navigating the U.S. market effectively.

Q: What is the average mortgage rate for foreign buyers of U.S. Properties at 75% LTV through America Mortgages?

DK: The average mortgage rate for foreign buyers at 75% LTV typically ranges around 1% higher than rates for U.S. citizens with excellent credit. However, rates may vary based on individual circumstances.

Q: Does the Rental Coverage + program require tax returns?

DK: No, it doesn’t. The Rental Coverage + program simplifies the qualification process by considering only the rental income of the property, making it easier for investors to secure financing without providing tax returns.

Q: Do you provide loans to renovate and flip a property?

RC: Yes, we do, but it’s typically more challenging for foreign investors to qualify unless they have extensive experience in real estate flipping. Generally, investors need a track record of successful flips to qualify for such loans.

Q: How do some recent changes in commission laws impact this whole process in the U.S.?

RC: Recent changes in commission laws primarily affect realtors and don’t directly impact mortgage lenders. However, it’s essential to stay informed about regulatory changes as they can indirectly influence the real estate market.

Q: The minimum loan amount is 150k. Can it be lower?

DK: Yes, on special occasions, we may consider lowering the minimum loan amount to around $100,000. Additionally, for investors with multiple properties, we can explore portfolio loans, grouping properties to meet the minimum loan requirement.

Q: Do you have any thoughts on investing in Durham, North Carolina, in terms of rental yield?

DK: Durham, North Carolina, presents an interesting investment opportunity with potential rental yields around 15%. However, it’s essential to conduct thorough research and analysis to ensure it aligns with your investment strategy and goals.

Q: Do you lend to Limited Partnerships?

RC: Yes, we do. Limited partnerships can qualify for financing, provided they meet our lending criteria and requirements. We can discuss the specifics of your partnership structure to determine eligibility and options.

Q: Does America Mortgages provide loans for properties in the UAE?

DK: No, our lending services are primarily focused on properties in the U.S.. However, we can offer guidance and assistance in financing U.S. properties for investors based in the UAE.