If you are thinking about purchasing property in the US as a foreign national, you likely have a lot of questions about how the lending system in the States works.
In the FAQ’s below, we will attempt to provide simple, straightforward answers to some frequently asked questions.
Q: Can a foreign national purchase property in the US?
A: Yes. That is what foreign national loans are for. So long as you meet the requirements and can document that you do, you should qualify for a loan.
Q: Can I use a foreign national loan to buy a home?
A: Foreign national loans are intended to be used to purchase investment properties, not primary residences. You can also use them to purchase vacation homes.
What if you want to purchase a primary residence in the US? For that, you make use of a regular mortgage. In order to qualify for such, you will need to be defined as a US resident.
Both permanent and non-permanent US residents may apply for a regular mortgage to purchase a home. You will simply need to be able to present your work permit or green card.
Q: Do I need a credit record in the US?
A: No, you do not need to have a US credit record in order to qualify for a foreign national loan.
Q: What documents do I need to have ready?
A: You should get the following documents ready before you apply for a foreign national loan in Miami or anywhere else in the US:
- A copy of your passport
- A copy of your Visa
- Proof of residence in your home country
- An escrow letter
- An accountant’s income letter
- Two credit card reference letters
- An employer’s income letter
- Two bank reference letters
- Two recent bank statements
- A copy of your purchase contract
Having all of these documents gathered before you fill out your application can save you a great deal of time and hassle.
Q: Is the down payment really 50%?
A: Not necessarily. This is not uncommon, but there are many opportunities to invest in US property as a foreigner without paying such huge down payment. You may be able to get away with closer to 25% if you shop around and if you qualify for competitive loan.
Q: Can I close quickly on the property I want?
A: Yes, if you are working with an experienced foreign national lender. There is no reason for this process to take any longer than it would if you were applying for a conventional loan.
In fact, because you do not need to verify a US credit record, there are situations where you could get a foreign national loan approved more quickly than you would a conventional loan.
Q: How high will my interest rate be?
A: A lot of people claim that foreign national mortgages not only carry hefty down payments, but also come with higher interest rates.
This is actually a myth. As a foreign national, you can apply for a loan with interest rates which are every bit as competitive as those for US citizens. So, you do not need to worry about excessively high interest rates eating into the profits from your real estate investment.
Q: Is it better to work with a direct lender or a mortgage broker on a foreign national loan?
A: There are benefits and drawbacks to both options. If you want to give yourself access to the largest possible selection of competitive loan offers, you will want to work with a mortgage broker rather than a direct lender.
A mortgage broker searches high and low for offers so that you do not have to. This frees up your time for other preparations involved in your purchase. Oftentimes, brokers can provide customers with competitive rates which are not available to the general public.
Q: Why do I need to work with a company that specializes in foreign national loans?
A: There are companies out there which focus mainly on regular mortgages for US citizens, but which may provide foreign national loans on the side.
It is recommended that you avoid working with mortgage companies that do not have extensive experience in foreign national loans.
Why? Because these companies do not have as much practice and familiarity with the loan process for foreign nationals. This means that they may be less efficient processing them. If you want to move on a property fast, that could be a problem. It also adds unnecessary stress to the process.
Q: What if I still have questions about foreign national loans?
A: Hopefully several of your questions about foreign national loans have now been answered. But if you have more, we would love to help you out.
Lending Bankers Mortgage works with a network of well over a hundred lenders throughout the Miami region, and specializes in foreign national loans as well as other types of commercial and investment loans. If you are ready to get started, please call (786) 220-1100 to schedule your consultation.