Is there a bubble?

Through the first half of 2018, existing-home sales are down just slightly, by 2.2%, while new home sales are ticking up 7.4%. Home prices continue to increase by 5%. Distressed property sales have fallen to historic lows, making up only 3% of total sales in recent months. The one area of concern is increasing housing unaffordability, that has still been inching higher. After reaching a cyclical low of a 63% ownership rate in late 2015, the rate increased to 64.4% in the second quarter of 2018 as three million additional households became homeowners in this time, bringing the total to 77.9 million. The total number of renter households has remained roughly the same at 43 million for the past three years.

Comparing the current US housing market with its performance in 2007-2008, where sub-prime mortgages dominated, today’s market is more disciplined, driven by common sense underwriting of mortgages, strong US economic indicators and jobs growth.

Yet even with increase in mortgage rates and higher home prices, the homeownership rate has still been inching higher. After reaching a cyclical low of a 63% ownership rate in late 2015, the rate increased to 64.4% in the second quarter of 2018 as three million additional households became homeowners in this time, bringing the total to 77.9 million. The total number of renter households has remained roughly the same at 43 million for the past three years.

Comparing the current US housing market with its performance in 2007-2008, where sub-prime mortgages dominated, today’s market is more disciplined, driven by common sense underwriting of mortgages, strong US economic indicators and jobs growth.

Is the US housing market headed for another bubble?

The short answer – No. Although no one can predict the future, the US housing market is far from becoming a bubble. The US housing market is on solid ground, well supported by consistent growth, strong demand and a business-friendly regulatory environment. The robust US economy and relatively low interest rates (5% range is still low) creates strong drivers for home ownership. Developers in many regions of the US unable to keep up with demand. In stark contrast to the 2008 bubble, we saw an overheated market with an over-supply of new homes combined with widespread subprime mortgage financing. In this sector or the US housing market, today’s growth has been something entirely different with clear developer caution and disciplined to not get ahead of themselves with speculative inventory.

What will drive tomorrow's housing market?

The fundamental drivers of the appetite home ownership and investment are job creation, population growth, housing permit issuances and housing affordability. These four highly-correlated factors create a win-win scenario for development alone.

The lack of supply and the accompanying home prices quickly rising are the sources of market headaches. However, the supply shortage is a much better problem to have, compared to a demand shortage. The current problem also is an indicator of no meaningful price decline nor an impending foreclosure crisis. Rather, there is a good possibility for solid home sales growth once the supply issue is addressed.

Hot VS. super hot.

The two hottest housing markets for example: Denver and Seattle. Both of these markets are said to be slowing down, from being super-hot to now just hot without the extra adjective. The months’ supply is less than 2 months in Denver and Seattle, and sales are falling. It is not because the buyers are going away, but because there just is not enough inventory and people are consequently being increasingly priced out.

Home prices in both markets have grown at around 10% for each of the past five years. That is an exceptionally fast price gain. The national job growth rate is 1.6% and the labor market is very solid in both cities with 2.8% job growth rate in Denver, and 3.0% in Seattle. The problem is, not enough homes were built or listed for sale to meet the demand. However, if more homes are built, and people choose to put their properties on the market to take advantage of this growth, more inventory is introduced, then home prices will not go out of bounds.

These two cities and the US housing market in general is benefiting from the country’s exceptional economic performance, due in part to 2018 tax reforms. Many US corporations are supportive of the current federal government’s pro-business, predictable regulatory environment and job-creation mandate. All propping up the US housing market for the foreseeable future.

Bubble?

The word "bubble" is on the minds of many home buyers and investors, it is worth laying out why today’s conditions are fundamentally different compared to a decade ago. Back then, lending standards were so loose that they were almost non-existent. By contrast, the lending standards today are still stringent, or asset based as evidenced by mortgage default and foreclosure rates are at historic lows. On the supply side, there was overbuilding with 2.1 million housing starts during the bubble years. Today, we are just scratching 1.3 million.

The US housing market is benefiting from the country’s exceptional economic performance, due in part to President Donald Trump’s 2018 tax reforms. Many US corporations are supportive of the current federal government’s pro-business, predictable regulatory environment and job-creation mandate.

Although no one can know the future, the US housing market is far from becoming a bubble, in fact it is easily characterised as the opposite – sustainable, measurable growth based on sound fundamentals.

The good news is … all data suggests that the probability of a nationwide home price collapse is not foreseeable future.

Investing and obtaining a mortgage as a NON-U.S. citizen

Now that we explained our reasons why we don’t believe there is an impending bubble, now may be the perfect time to invest and obtaining a US mortgage loan is easier than you may think.

Purchasing a house in the U.S. as a foreign citizen is simple if you plan to pay in cash (or having all the money saved to buy the home in one lump sum). If you’re not in the financial position to be able to purchase a home with cash or you find leverage is a better option for you, you’ll need to obtain a mortgage loan to purchase property. This is where the process becomes tricky. Fortunately the Global Mortgage Group’s primary focus is on the U.S. market, and it’s only focus are these types of mortgages.

Most U.S.-based mortgage lenders look at a borrower’s U.S. credit history to determine their eligibility for a mortgage loan. As a non-U.S. citizen, you don’t have a U.S. credit report, making it difficult for lenders to analyze the risk of loaning you money to purchase a home. That means your lender will elevate your risk factor as a borrower. This doesn’t have to be the case. Nor do you have to stay up late at night in Asia calling lenders, brokers and banks trying to find someone that will understand your situation.

It may take you longer to find a lender who is willing to work with you, and it may take longer to get approval for your mortgage loan. You might also pay a higher interest rate. We understand the complexity of analyzing risk, calculating foreign income and alternative sources of acceptable credit verification. We do it all day, every day. It’s not difficult if you know the terrain, and in most cases we can find a U.S. mortgage loan for every client.

Credit: data points and statistics provided by Forbes, NAR, US housing stats, Aug-Oct 2018.

For more information on mortgage loans in the U.S., Australia, U.K. or elsewhere please submit your details on our contact page, or email Global Mortgage Group at [email protected].

USA mortgage for NON US citizens, foreign nationals investing in US real estate.

It is now easier to qualify for a U.S. mortgage loan to purchase or refinance U.S. Real Estate even if you are NOT a U.S. citizen or have a valid U.S. Visa.

Although we LOVE the Power Of YES! We really like to see these “No” requirements even more!!

Here are the "NOs" (the good type of “no”)

• No income verification.
• No age restrictions. The buyer can be 70 + years old and eligible for 30 years mortgage term.
• No U.S. credit required
• No USA visa or residency required
• No reserves required
• No Life insurance is not required.
• No pre-payment or redemption penalty.
• No tax returns are required

30% down payment foreign national mortgage program enables foreign nationals, Non-U.S. residents or employment transferees to place minimum 30% down payment and finance up to 70% of the property value with no income verification.

Most of the lenders still require 50% down payment in order to obtain foreign national mortgage loan but we can arrange financing with as little as 30% down with no income verification and rates in the low 6s to mid 7s (11/01/18). Borrower must have verifiable funds for the down payment, closing cost, but no payment reserves are required.

Not only is there no prepayment penalty, meaning you can pay down or off the loan at any time, GMG SatedSelectFN 70% LTV mortgage for foreigners does not require Private Mortgage Insurance (PMI) either, so there is no extra cost.

We also offer rate and term foreign national mortgage refinancing with no limit to cash out option.

This foreign national refinance mortgage is available as a fixed and or adjustable rate mortgage. Adjustable rate are 3/1, 5/1, 7/1 term for 15 or 30 years fully amortized loan. Fixed rate are offered for the 10, 15 or 30 years fully amortized loan.

Here are some of the loan program features:

• Minimum 30% down Payment
• Starting 6.00% Interest rate (right now – 11/01/18)
• Term, 30 years, 20 and 15 years fixed
• Loan amounts up to US$5,000,000
• Par rate only
• No prepayment penalty
• International Credit History Report required in some cases
• 1 to 4 unit residential property eligible
• 72 hours for underwriting
• Closing on average 30-45 days

Here are the requirements for our foreign national loan program:

• Copy of executed purchase agreement (purchase only)
• Copy of passport
• Credit References (Credit card, Mortgage, Car lease) or International credit report
• Last 2 months bank statements showing enough funds for minimum of 30% down payment plus closing cost

*We can help with Credit reference, or International credit report if needed.


One of the most unique and inexplicably happy events of life is having a baby. This little bundle of joy keeps everyone on their toes, creating madness around the house and your lives, but somehow, it all seems worth it.

As a parent you likely already have a retirement fund under your belt, but have you considered alternative and traditional ways you can invest your extra cash to protect your children’s future? In fact, it’s easier than ever to invest in Real Estate with technology and options for obtaining mortgage loans even if you’re not a citizen of that country.

Investing in property is largely seen as a safe way to build wealth, but it is a long term strategy. The younger you start, the more effective it is, thanks to leverage (borrowing from a bank) and the power of compounding (time). For example, if you acquire a property for $500K at age 20 and it grows by a conservative 5% per annum, it will pretty much double by the time you are 35 to $1 million. How many people have $500K of equity at this young age? And by age 50, it will be worth 4 times what you paid for it, at $2 million. If capital growth is 7%, then the property will double in value every 10 years, thus accelerating your portfolio dramatically.

Should I invest in my own home country, the United States, U.K., Australia, or emerging markets? All the investment opportunities available can be overwhelming. We understand. So, to help you filter out the noise and make informed decisions, Global Mortgage Group has mortgage options parents should consider as great places to invest in Real Estate for your, and your children’s future:

Commercial Real Estate

We often think of real estate investing in terms of home ownership or maybe “house flipping,” but there are lucrative opportunities too in the commercial side of the industry that are no longer exclusive to ultra-wealthy investors. Online real estate platforms make it possible to invest in commercial real estate without ever stepping foot inside a property or country it is being sold in. Of course there needs to be a “trust” issue with investing in an asset, however, through online reviews, personal recommendations and proper research these risks can be mitigated.

A recent survey asked global participants to choose how they would invest $10,000, and real estate was the second most popular choice among millennials, Generation X, and baby boomers. Nearly 23 percent of those surveyed said they would pool their $10,000 with money from other investors to purchase Real Estate.

When you’re first starting out, a smart strategy is to focus on one type of investment, whether it be apartments, offices, retail, land, etc. A popular type of commercial real estate is student housing units — the very places you might be paying rent to when you send your kids off to college. Student housing in many University locations throughout the U.S. can be extremely lucrative investments.

Residential Real Estate

As a global citizen, if I wanted to invest in Singapore, Hong Kong, Seoul, Bangkok, Shanghai or any of the major global cities such as New York, San Francisco, London or Sydney, the barrier to entry would be my purchasing power and the ability or inability to obtain leverage from a bank or private lender. However, as an example, in smaller cities around the United States there are millions of Real Estate options for investors that never imagined they could own Real Estate, let alone be a Global Real Estate Investor.

Global Mortgage Group’s only focus is on sourcing the best options for non-citizens or Expats looking to obtain a mortgage loan to purchase or refinance Real Estate on a global scale.

"As many of your children will attend school in the U.S., Australia or the U.K., obtaining a mortgage loan to purchase residential (or refinance) property in the U.S., U.K. or Australia just became that much easier."

GMG Partners

Our partnership with institutions and private lending partners has made us the premier “go-to” source for real estate investors. Residential homes are the easiest to qualify for and a great way to build your portfolio.

The difficulty is the starting point, as young people rarely have enough for a large down payment for a first property. The good news is, most of our U.S. and Australia mortgage loans only require a minimum down payment of 30%. Note, that is 30% of a property with a purchase price far less than you could buy in Hong Kong as an example.

The opportunity is amazing to build and grow a viable Real Estate portfolio without a huge capital expense. If well researched, and with the right advice, a property can be cash flow neutral or positive in the current market. If held over time and as rates will likely increase globally changing the current economic model from a buyers to a renters market, it should remain quite manageable.

If you acquire several properties over time, manage properly and leverage smartly, imagine the amount of equity you can build up by the time your children are an adult or, when you’re ready to retire!

For more information on mortgage loans in the U.S., Australia, U.K. or elsewhere please email Global Mortgage Group at [email protected]


Are you a U.S. Expat living abroad, filing U.S. income tax, but earning income from your overseas assignment? If you answered YES, we created a U.S. Home Loan Mortgage program specifically for you! GMG PrimeSelect allows you to use two years of your U.S. tax returns, along with your monthly foreign income to qualify just as you would if you were back home in the U.S.

The credit crunch, which was largely caused by the U.S. banks’ cavalier attitude to mortgages and other loans, has put paid to the previous days of easy credit. It is now much more difficult to obtain a mortgage from a U.S. lending institution. For example, guidelines introduced in January 2013 encouraged lenders to demand full documentation from potential borrowers, and to be clearer about the consequences of low early repayment rates.

As an expat, you will find getting a mortgage even more difficult. Many lenders will not even consider lending use foreign income earned, so you would need to be persistent and shop around. Note that, as in many cases, mortgage programs may vary from state to state. With GMG PrimeSelect, you are now able to purchase U.S. Real Estate as an investment, second home or if your intention is moving back to the United States, owner occupied at prime rates, terms and programs.

Requirements


You will need to prove that you have sufficient employment and enough funds to repay the loan. Bear in mind that the more cash you have readily available to pay for a deposit, the wider choice of mortgage you will have. GMG PrimeSelect will allow up to 90% financing for a second home purchase.

GMG PrimeSelect mortgages are ‘fully documented’, meaning you will need to prove your income by supplying two years of U.S. tax returns. In addition to this, you will also need to show your last two months’ bank statements in order to show you have money sufficient to cover both down payment and closing costs. We will also require one month of pay statements in the country you are working in. If these accounts, pay and banking is in a language other than English, it will require a professional translation.

• Two years of U.S. Tax returns
• Two months bank statements (foreign okay)
• One month of pay statements
• Passport or drivers license
• Social security card
• US credit score (FICO)

Debt to Income Ratio

Most lenders will want your debt-to-income ratio to be no more than 35%. GMG PrimeSelect will allow up to a 45% ratio. This is rather aggressive, but often needed due to the fluctuation of the US dollar to other currencies.

LTV (Loan to Value)

Unlike many programs that restrict LTV for U.S. Expat foreign earned income, GMG PrimeSelect Loan-to-value ratios are generally around 80-90%. The maximum full term is 30 years regardless of age.

Mortgage Types

A wide range of mortgage products is available for U.S .expats looking to purchase or refinance U.S. Real Estate. Mortgages can be variable or fixed-rate, with flexibility over the fixed-rate term. In addition to the standard principle and interest U.S. mortgage loans, there are also interest-only mortgages, allowing for more cash flow. As most of these loans do not have pre-payment penalties you can pay towards the principle at will.

Do you have the income but doesn’t show on your US Tax returns? No problem either, GMG StatedSelect allows you to only state your income. We will not request or require proof of income including tax return, or monthly pay statements. LTV and rates vary for these programs but qualifying can be extremely simple.

One of our associates or partners will be happy to answer any questions you may have regarding GMG’s various loan programs. Please send us a message at [email protected]