In this Video we discuss how mortgage rates are determined, the Current State of the mortgage market and how we sees the markets evolving. We will aslo discuss how US Citizens and Foreign Nationals living overseas can use a Cash out refinance to improve their liquidity.
Global Mortgage Group has several Foreign National, Non US Citizen mortgage programs to obtain US Real Estate for both purchase or refinance regardless if they have US credit (FICO), residency or proof of income.
Most programs allow up to US$2,000,000 maximum cash out for a refinance or remortgage.
Global Mortgage Group has two US mortgage loan programs for non US citizens;
Stated Income – does not require income verification or tax returns. Perfect for non US citizen mortgage borrowers that are either self employed, or have numerous write-offs on foreign tax returns.
Full Income – requires the following;
• Two (2) years of foreign tax returns
• Two (2) months bank statements (foreign account okay)
• One (1) month pay statements
Foreign National mortgage borrowers must have a valid copy of their passport. US Visa is not required normally. You should also check that your country is not listed in OFAC – Office of Foreign Assets Control - Sanctions Programs and Information.
The down payment can range from 30% to 50% depending on the property type, interest rate, and documents that you can can provide. GMG has mortgage programs for non income and income verification.
US Mortgage Interest Rates for Foreign National borrower vary from the mid 5’s to the low 7’s and are subject to change every day. GMG’s compensation is not based on the rate and borrowers will receive best options available at the time of application.
The Foreign National or Non US Citizen mortgage borrowers needs to show two months (60 days) of bank statements and to show funds are "seasoned". Seasoned funds simple mean that funds have been in an account, US or Foreign for a minimum of 6o days for AML purposes. U.S. anti-money laundering laws require this.
If the borrower has money in cash, he/she will need to deposit that cash in their bank and let it season two full months.
GMG has loan programs that allow for 100% gift funds for Non US citizen borrowers looking to purchase US Real Estate. Gift funds are money given to you by a family member or friend without expectation of repayment. This money will also require AML seasoning requirements.
For most programs, reserves are NOT required.
For most programs, a foreign credit report or bank reference letter will be required.
The funds for the down payment and closing costs must be in a banking institution for 60 days (seasoned). These funds can be in a US account or non US account. Any bank statements require professional translation.
Unlike regular loans, Foreign National loans do have a minimum loan amount requirement. Remember that it is the loan amount, not the sales price.
If you have a specific scenario and property that you would like us to price it and give you the requirements for your client, please feel free to email [email protected].
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.
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.
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.
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.
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.
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].
A documentation loan is any loan that requires full information substantiating a borrower's claims of income and assets in order to gain financing. The vast majority of loans are documentation loans. Lenders use the documents provided during the underwriting process to ensure the application for financing is accurate and to determine the terms of a loan contract further. "No doc" loans, in contrast, require no verification. No doc loans are also known as "high-risk" loans, and they may even violate standard lending principles. Therefore, it is best to attain a documentation loan when possible by providing the necessary loan information.
The first thing you will need to supply a lender in order to prove you can afford a loan is verification of your income. There are several ways to verify income, and each lender may have specific requirements. One option that works for most lenders is supplying at least two years of tax information. For example, submit copies of the past two years’ worth of W-2 statements, which record your official income. If you are self-employed, you will need to supply Schedule C statements instead.
Lenders may also accept paycheck stubs or verification of income from your employer. However, many lenders would like to see that you have been earning an income equal to your current level for at least two years. The best scenario is to show continued employment for two years with the same employer with an increasing income.
Lenders will consider your assets when reviewing your full financial strength. Not all lenders need to know your “net worth” in order to extend your loan. However, if you are placing any collateral down on a loan, you will need to verify the value of that collateral through full documentation.
For example, if you are taking out a home equity loan, the lender may require an up-to-date home appraisal and a statement from your primary lender. The primary lender’s statement will reflect how much equity you have earned in the home through paying down your mortgage. This tells the second lender just how much it can expect to recover if you were ever to default on the loan and the lender needed to seize your asset.
Lenders cannot count your assets alone in order to determine your financial stability. Your debts, liens, and liabilities will also be taken into account. For example, when you apply for a mortgage, your mortgage lender will need to know if you also owe money to a student loan lender and a car loan lender.
This can affect your ability to afford a new loan based on your current income. Liabilities can be found through a simple credit check. Your credit report will reflect all of your debts and liens against your property. A credit check is completed without any documentation from you. All you will need to supply is your Social Security, Tax Payer Identification, or Credit Report number. The lender will carry out the credit check with your approval.
A low or no documentation loan requires very little verification of the claims made on an application. Documentation loans require a borrower to submit proof of income, proof of assets, and other documents prior to having a loan move through the underwriting process. A no or low documentation loan requires none of these items. Instead, the borrower must place only enough money as a down payment (30% min) in order to receive the loan. In exchange for the relative ease of the lending process, the borrower may have to accept higher interest rates and financing charges as well as a lower loan-to-value ratio on an asset.
Global Mortgage Group specialises in Non-U.S. Citizens and Expats looking to purchase or refinance U.S. Real Estate. All the programs listed above may be available depending on your situation. With over 11 languages/dialects and representation throughout Asia, Australia and Europe, one of our experienced professionals will be able to find the right loan for your borrowing ability.
Contact us at [email protected].
As a U.S. real estate investor, investment mortgage loans can be very beneficial to you. There are a number of programs on hand that make it possible for people to get a mortgage to invest in real estate. Global Mortgage Group focuses specifically on these types of mortgage loans.
Some are better than others, but they can all help you out in some way. If you are considering getting a mortgage, here are a few advantages that you can get from an investment mortgage loan.
Use other people’s money – The biggest advantage of using investment mortgage loans is that you get to use other people’s money. Many financial experts have said that you should use other people’s money whenever you can. When you get a mortgage, you only have to put up a certain percentage of the money for the property, but you still get to benefit from owning the whole property. You get to take advantage of the appreciation of the property, and you get to use it for whatever you want. This allows you to hang on to your capital and use it for other investments.
Reasonable interest – With most mortgages, you will be able to get a very reasonable interest rate with or without a U.S. credit score (FICO). When you get a low-interest rate like you can with an investment mortgage, it can save you a substantial amount of money. For the cost of the loan, it is usually well worth getting a mortgage instead of using your funds. Hang on to your cash and use it towards additional investments.
Easy approval – With an investment mortgage, you will usually be able to tell whether you are approved rather quickly. Global Mortgage Group has pretty cut-and-dry standards when it comes to getting you approved for an investment mortgage. GMG has loan programs for U.S. expats with or without U.S. credit. We understand that living abroad often changes factors and your ability to borrow in the U.S. Our loan programs are tailored to your exact situation. Not a U.S. citizen, Foreign National, or considering relocating abroad for work or school? We can help. Our Foreign National / Non-U.S. citizen mortgage loans were created for these situations. Qualify with No U.S. credit. No U.S. residency. No income verification. It’s not simple, but we have it down to a science with our expertise in this market. You will know where you stand and if you will qualify within a reasonable amount of time.
Increase your reach – With the use of investment mortgages, you can increase your investment power. As you grow, you can keep buying more and more property. In Asia, where property prices have increased, and square footage and yield have decreased, finding an affordable investment outside your home country only makes sense. In fact, many people would not be able to purchase property otherwise as it usually takes a big investment.
Build your net worth – Hong Kong, Singapore, Shanghai, and other large Asian cities have cooling measures to stabilize a fast appreciating real estate market mainly due to outside investment and the lack of affordable real estate options. Being able to build your net worth on a global scale with a reasonable mortgage loan that eventually will be paid off gives you the same opportunity as anyone else, regardless of your passport. You are free to do what you want with all of the property. If you had to rely on your own funds for all of this, much of it would not be possible.
Using an investment mortgage can be a great way to get involved in the real estate investment market. Many people have gained considerable amounts of wealth through real estate investments. Therefore, if you are at all considering getting involved in the field, you should definitely take advantage of investment mortgages. The advantages that you will receive as a result of using them will help you in a number of ways. If you can qualify for one, it makes a lot of sense financially. Global Mortgage Group’s primary focus is helping non-U.S. citizens and expats obtain prime, quality investment mortgage loans not only in the United States but on a global scale.
For more information on U.S. or mortgage loans in other countries please enquire via email – [email protected].
Global Mortgage Group Pte. Ltd. is the world's leading international mortgage specialist. Based in Singapore with offices and partnerships across the globe, we connect our international clients to our network of lenders around the world. GMG offers financing solutions in the United States, United Kingdom, France, Canada, Australia and Singapore.
