Mortgage in America is available not only to its citizens and to foreigners with a residence permit. A non-resident will be able to get a loan for the purchase of finished or under construction housing at 5-9% per annum. The amount of the down payment must be at least 30%. The final terms depend on the creditworthiness of the client, his reputation, and the specific situation.
Before issuing a mortgage, the bank or other financial organization like Payday Depot will ask for an independent expert’s assessment of the quality and cost of the loaned object.
List of documents
Each case has its own unique list of documents. The minimum set of documents is usually as follows:
- Valid passport with its copy.
- Internal passport (+ copy) and proof of residence address.
- Completed application form.
- Document confirming the right to stay in the USA.
- Social security card number.
- Income certificate from work for the last three years.
- Bank statement on the movement of funds on the account.
- Letter of recommendation from any major bank.
- Copy of the sales contract.
- Letter from the National Credit Bureau about the quality of credit history.
All documents must be translated into English and certified by a notary.
Typical mortgage conditions
The typical size of a loan is from $100,000 to $200,000. The monthly payment should not exceed 28% of the borrower’s income.
Banks offer financing programs with a fixed interest rate (fixed-rate mortgage, FRM) and floating (adjustable-rate mortgage, ARM). In the second case, the rate is also fixed for the initial period (3, 5 and 10 years), then it changes depending on the market situation. The frequency of interest rate revision is determined by the terms of the agreement.
Foreigners are most often offered loans for 30 years. The conditions of the mortgage plan may no longer suit the client, in which case the loan can be refinanced. It is enough just to look at the offers of other banks.
Now mortgages in the US are very cheap. In the case of a floating rate, banks provide the option to change it after a certain period. The likelihood that the percentage will go down is extremely small. The fixed rate guarantees the client that the amount of his monthly payment will not increase. The borrower also has the right to repay the loan ahead of schedule without any penalties.
Banks may offer you to take a mortgage vacation if a situation arises when you cannot make payments for some reason. Therefore, at the height of the pandemic, during widespread lockdowns, many received letters offering such deferrals on payments for three to four months. In this situation, you need to call the bank and clarify the conditions. There is a risk that you will simply be asked to pay the entire amount for these months after such holidays.
For foreigners, it is better to contact a mortgage broker. As a rule, he works with different credit organizations and can choose a product that meets your requirements. In addition, he will calculate the maximum loan amount, and select the optimal interest rate and loan repayment period taking into account your income, and credit history.