Mortgages, Vacation homes & real estate

Getting a Mortgage: Three Things to Expect as a Foreign Buyer

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Given that the residential real estate market in the United States is so hot, international investors continue to expand their portfolios with home purchases throughout the nation. The majority of such investments are purchased in-full with cash; however, if you’re not in a position to buy a property outright and need a mortgage to buy a home in America, here are three things you should know.

1.Getting a mortgage as a foreign national can be much more expensive than it is for U.S. citizens...

Don’t expect to get the same terms (e.g. interest rate, required down payment, etc.) that would be offered to a domestic borrower. The fact is that international investors do represent an increased risk to the lender, hence the higher rates and fees. You also may not have access to the same types of mortgages; some lenders with programs for foreign nationals only offer adjustable-rate and fully-amortized mortgages, with no fixed-rate options available.

2....but, it’s not impossible!
Yes, it may be more challenging to get a mortgage as a non-citizen, but thousands of buyers do so successfully every year. If you are prepared to work to find the right lender, can put down up to 50% of the purchase price as a down payment, and can provide bank statements showing proof of income, chances are there’s a mortgage that will meet your needs.

3.Popular real estate market = more likely to find a willing lender.
It probably goes without saying, but higher the presence of foreign investors in a particular real estate market, the greater the likelihood of finding a lender that has experience with and is friendly towards international investors. For example, getting a mortgage for an apartment in New York City, Florida, or California is typically easier than, say, Alaska or Iowa.

Your realtor should be able to make a recommendation for an experienced lender in your geographic area of preference, especially if the realtor is equally familiar with real estate purchases made by foreign nationals.

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