Most foreign investors interested in obtaining a US mortgage likely do not have a credit history in the country. This is a key aspect used by banks to determine whether to lend someone money to fund a real estate investment.
Is it possible for a foreign investor to obtain a mortgage in the United States? Keep reading to find out.
Can a Foreign Investor Get a Mortgage in the US? – The Verdict
If the foreign investor does not have permanent ties to the United States, it is difficult to obtain approval for a mortgage. However, it is not impossible. Depending on the strategy used by prospective borrowers, it is possible to get a US mortgage approved by a lender.
The first step is to consult with an expert attorney to assess your situation and tailor a specific plan. It is fundamental to estimate your purchase budget and identify how much you can afford.
During the assessment, you must remember that the monthly payment is not exclusively comprised of the mortgage principal and interest. The estimation must include property taxes and homeowner’s insurance premiums.
Depending on the property, the mortgage payment may include homeowner’s association dues and assessment fees.
Obtaining Mortgage Pre-approval as a Foreign Investor – Feasible Solutions
Whether you are buying a residential property or using financing to fund real estate investments, it is possible to find financing solutions available without a US credit history.
In Florida, there are lenders specializing in foreign national mortgage loans. These professionals utilize alternative methods to assess a borrower’s credit risk, including the individual’s creditor history outside the US.
Obtaining a pre-approval for a mortgage as a foreign national is fundamental to anticipate how much the lender may loan to fund your investment before searching for real estate offers. To obtain pre-approval with a specialized lender, they must verify the applicant’s identity and financial situation.
The standard supporting documentation required may include income statements and evidence of assets or savings accounts which may contribute to down payment costs associated with buying US real estate. Additionally, a non-exhaustive document list may include:
- A copy of the applicant’s passport
- A valid US visa (if applicable)
- Detailed contact information
- An International Credit Report Form issued by the lender
- A two-year report with the applicant’s employment history
- A two-year report with the applicant’s residence history (including addresses, whether the property was owned or rented, rent terms, etc.)
Can a Foreign Investor Get a Mortgage in the US? – International Credit Report
When assessing whether a foreign borrower is eligible for a US mortgage, specialized lenders may use an International Credit Report (ICR).
Generally controlled by global banks and other financial entities, these credit reports are used to compile credit information from an investor’s financial history. A standard ICR usually includes:
- The applicant’s credit history in different countries
- The applicant’s property ownership history inside the US
- The applicant’s property ownership history outside the US
- Liens, judgments, and foreclosures against the applicant (available in public records)
- A two-year verification of the applicant’s employment history
- A two-year verification of the applicant’s residence history
- Property tax and insurance amounts