How can a Foreigner Apply for a Mortgage to Buy Real Estate Property in the United States

U.S. home sales are skyrocketing—not only to domestic residents, but also to foreign investors. From April 2016 to March 2017, the total annual real estate sales to non-U.S. investors surpassed $153 billion, a 49 percent jump from a year earlier, according to the National Association of Realtors. While many foreign investors buy properties with all cash, they may not realize that they could also procure a U.S. mortgage. With a mortgage, the same amount of cash would allow a foreign investor to purchase two properties, instead of just one, with 40 percent down payment for each, and still have some money left to cover closing costs.

In this post, we’ll explain how to easily apply for a U.S. mortgage loan as a foreign investor.

Buying Properties in the US: The Basics

A foreign borrower who resides outside the United States and is neither a U.S. citizen nor a permanent resident can apply for a mortgage to buy properties in the country as a vacation home and/or an investment property (i.e. rental property). Since the current law requires lenders to document the borrower’s ability to repay the loan, the foreign borrower will need to furnish the lender with proof of income. Due to anti-money laundering laws, all funds used for down payment and closing cost need to be sourced, i.e. they must come from acceptable sources such as gifts from family members, salary income, etc.

Documents Needed for Foreign National Loans

• Proof of identity.The foreign borrower will need to provide a copy of a valid, credible passport.
  
  
• Proof of income. Tax returns for the past two years are ideal. In lieu of tax returns, an employment letter with salary information on company letterhead will also suffice.
  
  
• Proof of creditworthiness. Foreign credit reports are acceptable. Alternatively, four pieces of credit references, such as credit card number, debit card number, mobile phone number, utility bills, etc., will be needed.
  
  
• Proof of funds. Two-months of bank statements, demonstrating sufficient funding for the down payment, closing costs, and reserves, will be required as well.

Estimated Loan Costs

There will be certain costs associated with the loan and the settlement process.

1. Before loan approval, the following cost would be incurred:
   • International credit report fee: USD$250;
   • Appraisal fee: USD$800-$1,200, depending on occupancy (as vacation home, or as rental property) and the size of the subject property;
2. Upon loan closing (i.e. final loan document signing), the following cost will be collected by the settlement company:
   • Loan origination fee: 0-2 percent of loan amount, depending on the interest rate, and disclosed to and accepted by the borrower at the beginning of the loan process. The higher the rate, the lower the loan origination fee;
   • Other 3rd-party fees: USD$2,000-$4,000, including settlement charge, title insurance, notary, deed recording fees, and/or government taxes, etc. The actual amount is dependent upon the state and the county where the subject property is located, the purchase price, and the loan amount.

Estimated Time to Obtain a Mortgage

It usually takes 30-40 days from the beginning of a loan application to signing the final loan documents.

Foreign National Home Loans from Tiger Loans

If you are interested in obtaining a mortgage to buy properties in the United States, and would like to learn more about the U.S. mortgage application process as a foreign borrower, we invite you to contact Tiger Loans here or send an email to inquiry@tigerloans.com. Tiger Loans provides one of the best foreign national loan programs in the marketplace, all backed by best-in-class customer service.

Here are some requirements of the Foreign National loans offered at Tiger Loans:

• Down payment is 40 percent or more
• The minimum loan amount is $150K
• The maximum loan amount is $5 million
• Power of Attorney is not permitted; as a foreign borrower, you’ll need to go to a U.S. embassy or consulate to have loan documents signed and notarized.

There are remarkable real estate opportunities awaiting international investors—and getting a foreign national loan has never been easier or simpler. To begin the process, contact Tiger Loans now!

 

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.