Financing, especially via a mortgage loan called "mortgage" is very popular with real estate investors who benefit from a leverage effect. But when one is a foreigner and one has no credit history in the United States, what financing solutions are available?
Finance your purchase in Miami and Florida, from abroad:
Most European banks are cautious enough to grant mortgages for properties in the United States. Indeed, their lack of knowledge of the local market and the impossibility of taking a guarantee on the property encourages them to be cautious.
However, some financial institutions agree to finance property in the United States, by ensuring your solvency in another way. The bank in question can accept the following guarantees:
- real estate as collateral in the country of origin
- a substantial contribution, either cash or via an advance on your life insurance policy
- by bringing a portfolio of shares
The foreign buyer will then benefit from the interest rate applicable in his country of origin, which may be an advantage.
In this configuration, the transaction in the United States is considered "cash", that is to say with cash payment, without suspensive clause of credit. The file must be perfectly locked so that funds are available at the "title agent" (equivalent of the notary) on the day of signing, under penalty of breach of contract!
Finance your purchase in Miami and Florida, from the United States:
It is quite possible to buy a good on credit in the United States, without being an American resident. In general, the organizations request 35 to 50% of contribution according to the file: profile of the purchaser and amount borrowed.
Barnes Miami is able to put you in touch with financing organizations specializing in financing real estate in the United States for international investors.
As a rule, it is possible for a non-resident to obtain a "mortgage" to finance up to 65% of the property acquired. The rates offered, for customers without history in the country, currently vary around 4.5 and 5.3%. However, we must pay attention to variable rates, because according to all predictions, interest rates, historically low in the United States at this time, are expected to rise by the end of 2018.
This loan is secured by a mortgage on the newly acquired property, and is also subject to income conditions. In fact, the bank must be able to justify its ability to repay the loan. In general, banks require that your income can cover 3 times the monthly repayment of the loan.
This method has the advantage of avoiding the risks related to the exchange rate between the dollar and the original currency of the buyer, especially when he wishes rent your property in Miami, since he then receives a rent in dollars and repays in loan in dollar also.
The loan can be amortized over a period of 5 to 30 years depending on the project and needs. It is sometimes possible to negotiate with the bank an early repayment clause without penalty.
The deadline for obtaining a mortgage can be up to 60 business days. While the closing times for a cash purchase can be very fast (sometimes only two weeks!), It is necessary to plan a closing at two months minimum for a purchase with financing. We therefore advise you to start the steps upstream (qualification, choice of the provider, preparation of all the elements requested for the file ...). Be prepared to provide many documents and information, both on your assets in your home country and in every country in the world where you hold property. If your purchase is the start of other credit investments in the country, make sure that the bank participates in the credit information sharing program to build your history for the future. This is not the case for all lending institutions.