6% of home sales nationwide bought by foreign buyers. Information on foreign national mortgages

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Foreign national mortgages have returned to the U.S. housing market.

Original article from themortgagereports.com

Now, it’s not just citizens of Canada, Mexico and the U.K. who can buy homes with U.S. financing. Anyone, from anywhere, with adequate down payment and income can mortgage a U.S. home. The return of foreign national loans arrives at an opportune time — the U.S. housing market is emerging from its winter months.

According to the National Association of REALTORS®, international buyers purchased more than $68.2 million in U.S. residential real estate in the twelve months ending March 2013, comprising vacation home sales in Arizona; investment property sales in Chicago; and long-term investments throughout California and Florida. In terms of total U.S. home sales by value, foreign buyers accounted for 6% of home sales nationwide.

This figure may rise in 2014 and 2015.

For much of history, investing in U.S. real estate has been profitable. Lately, however, as individual wealth increases in non-U.S. markets, investors abroad have sought the diversification and stability that the United States housing market tends to provide. Real estate is the nation’s largest asset class and values are up more than 10 percent annually in many U.S. markets since 2011.

Thankfully, banks are servicing foreign buyers in want of a mortgage. Different from 2008-2013 when foreign national lending was scarce, today’s international buyers have options. Foreign national mortgages are — once again — available via many U.S. banks.

International Buyer Mortgage Loan Traits

U.S. banks are returning to foreign national mortgage lending. Loans are not available from every U.S. bank, but the ones that make foreign national loans available are tending to follow similar loan guidelines.

At minimum, as one example, a non-U.S. citizen should expect to make a home downpayment of 30 percent or more; while, in some cases, downpayment percentages will range as high as fifty percent.

The percentage of your downpayment will vary based on loan size, property type and a bank’s overall comfort with your profile. A home buyer with extensive international borrowing experience may be allowed to make a smaller downpayment than a buyers making his first international home purchase. Similarly, a buyer of a single-family home will typically be allowed to borrow more money than a buyer buying a condominium or co-op.

Beyond the downpayment, expect to provide the following to your lender:

Credible income documentation for the last two years
Passport for identification purposes
Credit reports from your native country and/or U.S. credit bureaus
Tax Identification Number (TIN) as issued by the Internal Revenue Service (IRS)
Proof of assets for downpayment and reserves, sourced from a worldwide financial institution
Note that, because you will have a TIN, green cards, work visas and social security numbers are not required. The TIN will be used for tax payments to the U.S. government once annually.

Lenders will typically treat your purchase as a “second home” or vacation program unless the home is a designated rental property for income. Loans for investment properties carry more stringent standards and may require additional reserves or evidence of credit strength.

For non-English speaking buyers, or for buyers whose documentation is printed in a language other than English, translation services must be provided.

It’s recommended to seek your local U.S. Consulate or Embassy for translation services. You will likely close on your mortgage at these locations, too.

Lastly, note that U.S. mortgage rates are not set by the federal government. Mortgage rates are set by individual banks and can vary wildly from lender-to-lender. If you don’t like the rates you’ve been quoted by Wells Fargo, for example, be sure to compare those rates to the rates from a different bank, too. Mortgage programs for foreign national buyers are available in all 50 states. If you plan to use foreign national financing, though, pre-qualify your loan before you submit a contract on a home, which may be binding.

As a specialist in working with foreign national buyers especially Canadians please feel free to contact me to go over the real estate options available in Florida.

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