As a foreigner to get a loan for housing in New York: instructions and pitfalls
Obtaining a loan for a foreigner in the United States has acquired a mass of myths - many tourists and immigrants are sure that it is impossible to buy real estate on credit in America without a green card. In fact, everything is simpler. If you have recently arrived in the United States, then you have every chance not only to take out a loan on almost the same terms as Americans, but also to receive a number of benefits compared to immigrants who have lived in the country for a long time.
How to do everything correctly and what important points need to be considered before you make a deal to buy real estate with the financing of an American bank, said a licensed real estate agent in New York Dmitry Stasyuk for YouTube channel Emigrantvideo... Note that the expert talks about the laws of the state of New York - in other states, conditions may differ significantly.
Why is it profitable for a foreigner to take a loan in the USA
If you compare a foreigner with an American or an immigrant who lived here for a while and officially showed his income for several years, the foreigner will have more advantages.
Better to shop right after arrival. When you start working in the United States, it will be more difficult - the bank will already require an American credit history for several years, statements of income from work in American companies. It may take 3-4 years before you develop sufficient “financial credibility”. When you just arrived, the bank treats you as a foreigner who buys a second home in order to come to America as a tourist and not stay at a hotel. It's much easier and faster.
How a foreigner can get a mortgage in New York
As a rule, specific banks specialize in specific areas, some work mainly with buyers of apartments, some specialize in houses.
Any solvent person who can prove their financial status and lack of a dubious background can apply for a mortgage. The applicant must meet the requirements requested by the particular bank. As a rule, these are: availability of money for the initial payment; a certain income that will show the bank that the person will be able to pay utility bills for the apartment and make payments for the house. Some financial programs have a lower limit - for example, from 100 thousand US dollars.
Where to begin
You must have a passport, a US visa and you must be in the United States at the time of application. First visit the bank to find out the specific conditions and see if they will give you a loan at all. After studying your situation and documents in a few days, the bank may issue you a document called pre-approval. With this paper, you can already search for specific housing options for mortgages. The document will help a lot, because if you buy housing with bank financing, the seller must see that the bank agrees to go for it.
There are certain banks that work with foreigners, they have special programs. The most popular banks offering this service are Citibank and HSBC, as well as Chinese banks, which consider all applicants.
The standard terms of the initial payment are 30-40%, sometimes they consider the option of 25%. The money must be in an account with a US bank or with a bank in the applicant's home country. It is important to know that the amount on your account must be more than the specified percentage. Typically, it includes:
- required down payment;
- the amount that 12 will cost in months of payments to the bank and house;
- amount to close the transaction - 2-4%.
Realtor services are free - sellers pay them. Until the moment the transaction is completed, you, in fact, do not pay anything at all, except money for the services of a lawyer who will prepare all the necessary documents, but compared to the cost of the apartment, these are small expenses. Without a lawyer, not a single transaction is closed in New York - he checks the purity of the transaction, whether there are any restrictions on real estate, takes responsibility for the entire documentary part. The cost of a lawyer's services starts from 2 thousand dollars, depending on the amount of work. The average price is 2-3 thousand.
How is bank checking
You will need to bring bank statements, a certificate from the company you work for, and fill out a questionnaire with additional information - for example, how long have you been employed, what other assets you have, etc. The bank makes inquiries, including international ones, to check how true the information is, to make sure that you are not on the lists of debtors at home, on the lists of Interpol, terrorists, and so on. This usually takes a few days.
When the bank asks what money is in your accounts, it will take into account that this money must be there for at least 3 months - therefore, in this case, depositing money and immediately withdrawing it will not work. It is important for the bank to see that you have not borrowed the money, it is yours personally. Until the closing of the transaction, the bank will monitor the movement of the account, and require confirmation and explanations for each relatively significant amount.
The bank tries to check as much information as possible: it will call the job that you indicated in the certificate, contact the bank whose data you provided in the certificate of financial status, and will try to confirm through all possible channels your solvency and the absence of a criminal history. The bank wants you to pay - and as long as you pay, there will be no special questions about what your real income is.
What do standard credit terms look like?
There is practically no difference in the percentage of the loan for an American and a foreigner. For example, you take a loan for 30 years, the average rate will be 4-4,5%. You can fix the rate for the entire term or for several years (in the second case, the general conditions may be more profitable). The bank is not entitled to raise the interest rate during the period specified in the contract.
It is important to know that the bank may refuse to purchase a specific apartment if it finds problems - sometimes this happens at the last moment. Therefore, a lawyer is needed so that you do not sign up for the purchase of an apartment and suddenly do not remain without funding.
From beginning to end, it takes at least a month to process a loan for an apartment or house, on average - about two: you go to the bank, after a few days it gives you a paper, you look for an option, then you sign an agreement, the bank also starts checking the apartment (all whether the property is in order, whether the house has financial problems), and gives out money.
How much will the bank
Banks are ready to give foreigners no more than $ 3 million, to which, however, you can add your own money and buy housing - there is no upper limit on the purchase.
New laws for wealthy foreigners: if you are the owner of a large company and you have more than three million dollars to buy an apartment in Manhattan, according to the new rules you will now have to disclose the name of the individual owner, although previously most businessmen purchased such property in the name of the company.
If you stopped paying on a loan
America has a very simple system of influencing debtors. First, the bank has every right to require the defaulter to close the loan in a short, time-limited period. Secondly, it has the right to sell your house under the hammer very quickly, for which you paid all the previous amounts. And if you are not sure that you will be able to pay monthly installments, it is better not to get involved in a loan. In the United States, it doesn't matter how many young children are registered in the apartment - keep this in mind.
It is also important to know that the purchase of real estate will not help you become legalized in the USA and will not contribute to obtaining a visa, unlike in many European countries.
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