2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
Everyone dreams of owning their own home. However, it is not possible to accumulate the required amount of money in a short period of time. You don't want to wait either, and in this case, many people turn to the bank for services.
Mortgage today is very popular not only in Russia, but also abroad. More and more residents of the Russian Federation prefer to buy real estate overseas. What awaits those who prefer to apply for a mortgage in the US? What to prepare for? Is it difficult to get such a loan for those who are not a resident of this country?
What mortgages are in the US?
Most citizens are very surprised when they find out what requirements must be met in order to receive such a loan. No wonder, because the interest rate on overpayments in the US is relatively low. In addition, in America, it is designed so that this type of lending is available to all categories of citizens.
At the same time, many overseas property owners have noticed that financial companies are quite loyal to providing loans to those who do not permanently reside in the country.
US Mortgage Conditions: Interest Rate for Citizens and Residents
Ontoday, mortgage lending in this country is available even to people who are not US citizens. According to the latest data obtained by the Association of Re altors, about 50% of foreigners most often purchase real estate on credit. At the same time, 66% of buyers are permanent residents.
As a rule, when obtaining a mortgage in the US, the presence of a green card is of great importance. At the same time, citizens can count on the maximum loan amount, which is up to 97% of the total cost of the selected object.
One of the main advantages of such lending is a fixed overpayment rate, which currently ranges from 3 to 6%. Thus, mortgage interest in the US is negligible compared to Russia.
At the same time, customers can count on an increased loan term, which ranges from 15 to 30 years. People over the age of 18 are eligible for this loan. At the same time, the United States does not provide for a maximum age at the end of the loan term.
However, before you go to the bank and apply for this type of loan, you should understand a few nuances.
Interest rate
According to the requirements of the law, in the US mortgage interest rate cannot exceed 4% per year. Consequently, even the most comfortable apartment, valued at a fairly large amount, can be purchased with a minimum overpayment if you apply for a loan. It should be noted that such low interest rates are notfound in other countries. As a rule, banks are more interested in getting the most profit. Accordingly, for this they need to increase the amount of overpayments.
Many people assume that the decrease in interest is due to the fact that US financial institutions offer additional payment for certain services. There is also a theory that overseas banks are in crisis. However, neither assumption is true.
Today, hundreds of loan agreements are concluded daily in America, provided to citizens for the purchase of housing. Thanks to this number of applications, banks have a large profit, due to which they can afford to significantly reduce interest. The main secret lies in the number of customers, thanks to which both parties are satisfied.
Thus, not only mortgages are beneficial for US citizens. In the US, a resident of another country can also get a loan on favorable terms.
Payment term
As mentioned earlier, the loan repayment period can be up to 30 years. This indicator once again convinces that banks in this country are distinguished by stability and constant profit.
If we talk about the residents of the United States, then almost every one of them took out a mortgage and repaid it very quickly. This practice has existed in the country for many years. Therefore, a mortgage in the United States today is considered affordable for almost any category of borrowers.
Loyal attitude to customers
Yes indeedthere is a practice in American banks according to which they are most likely to confirm the issuance of a loan. At the same time, almost any property can be purchased with a mortgage. However, this does not mean that banks do not conduct thorough checks of selected objects. However, unlike Russian financial institutions, a minimal percentage of people receive a refusal.
It is also worth paying attention to the fact that US banks do not have a general scheme for working with clients, so each case is considered on an individual basis. In addition, bankers in America are very supportive of the use of mortgaged real estate. If we talk about Russia, then in this regard it is very difficult to get approval. Therefore, it is not surprising that more and more citizens of the Russian Federation are beginning to think about purchasing real estate abroad. Cases of granting mortgages in the USA for Russians have become especially common.
However, before starting to draw up papers, it is worth clarifying what exactly is required for this.
Documents
To get a mortgage in the US, you need to prepare a standard package of papers. Of course, first of all, you need to provide documents on legal stay in the country. If a citizen is a permanent resident, then in this case a green card is required to be presented. Tourists can show a visa and a foreign passport. In addition, a printout of a credit history for the last 2 years, if any, will be required.
Also, in American organizations, there is a practice according to which clients mustprovide letters of recommendation from other US banks or foreign financial institutions. You will also need to have a Social Security number to qualify for a mortgage.
If we talk about certificates from the place of work, then in this regard in the US everything is much stricter. The client needs to provide documents that will indicate a stable monthly income for the last 3 years. In addition, only those citizens who have paid income taxes in America over the past 2 years can count on receiving such a loan.
Additionally, a bank account statement is provided. This is necessary in order for the banker to make sure that the borrower is really able to pay the down payment and expenses that may be required to process the selected loan. Additionally, you will need to obtain information about the property itself.
The entire package of documents must be translated into English and certified by a notary. Experts recommend at the time of application to acquire an American account in a US bank. In terms of application processing time, decisions are usually made within 3 weeks, but after that, you will have to wait another 4 months before receiving a mortgage.
Additional costs
First of all, you will need to make an initial contribution, which ranges from 350 to 2 thousand US dollars. Additionally, the borrower must pay a fee of 2% of the total cost of the selected loan. Perhome insurance annually you need to pay from 2 to 3 thousand US dollars.
If we talk about the additional costs that may be required, then non-residents of the country in this case will have to pay for real estate valuation. The cost of this service ranges from 350 to 2 thousand US dollars. If the price of the property is more than 100 thousand US dollars, then in this case the assessment amount is doubled. At the same time, unlike Russian banks, American financial institutions do not require borrower life insurance.
Advice to borrowers
When applying for a mortgage in America, special attention must be paid to the preparation of papers. The best way to do this is to contact a broker who will be able to collect the entire package accordingly. The fact is that in the US they take every paper very seriously. If an error is made in any document, this may be the reason for rejection.
Some don't want to waste time and collect all the necessary information. In this case, a minimum package of documents is provided, but you need to be prepared for the fact that the mortgage interest rate will be much higher. Before making a transaction, it is necessary to discuss with a representative of the bank all possible additional costs. They may differ depending on the financial institution. Therefore, you need to clarify exactly what state and other taxes or fees you will need to pay.
Mortgage features
If we talk about the distinctive characteristics of mortgage lending in this country, then in thisIn this case, it is worth paying attention to the loyal attitude of banking institutions to the real estate that the client wants to purchase. When compared with domestic banks, they are much more serious about this process. After all, if the living space is in the register for demolition or does not meet all the necessary requirements for living, then a banking institution may suffer significant losses.
Another distinguishing feature of lending in America, in addition to the low mortgage rate in the US, is that, if desired, the client can get a loan with a floating interest rate. In this case, the amount of the overpayment may vary.
In closing
Regardless of the country of issue, any loan requires attention. Do not seek help from private brokers or those who offer to help you get a lower interest rate. All information is recommended to be obtained from employees of an official banking institution.
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