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How to get a USA mortgage as a non-resident

Moving to the USA and need a mortgage? Get the right advice here.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 4th July 2019* | Published: 11th June 2019

Many Brits dream of moving abroad, and every day we receive lots of enquiries from customers looking to get an overseas mortgage in the USA. And considering the opportunity and diversity the country offers, it’s easy to see why.

So whatever your situation, whether you’re after a jumbo mortgage in New York city, have your eye on a holiday home in sunny Florida, or seeking a luxury mortgage in exotic Los Angeles, we’re on hand to help.

Continue reading where we’ll be covering how to get international mortgage loans in the USA, what the American mortgage process involves for UK citizens, general information about buying overseas, and a lot more:

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Can you get a mortgage in the USA as a UK resident?

The answer is yes, it is possible to get a US home mortgage as an international resident.

Getting a mortgage in the USA can be surprisingly quick, with some buyers completing in as little as four weeks. If you’re a British expat, the process tends to be far simpler because the chances are you’ll have a Green Card or work visa.

Whatever your situation, there are a few things to be aware of when buying property in this country. For example, if you’re a first-time foreign buyer in the USA you may be required to pay your first year’s home insurance in advance, as well as some local taxes.

Should I choose a UK or US mortgage?

As a British citizen, you have a few options for funding your American property mortgage. Which is best for you completely depends on your circumstances:

  • Remortgage your UK home (referred to as a “reverse mortgage” in the US), and purchase the new property with cash.
  • Take out a mortgage with a UK lender to buy a home in the US.
  • Buy an American property using a USA mortgage lender.

Before you make a decision, contact a whole-of-market broker specialising in overseas mortgages.

We can advise which is the most viable option for your individual situation and ensure you receive the best American mortgage interest rates. Make an enquiry.

How do mortgage loans work in the USA?

Like the UK, the US mortgage market is very well developed. While the two share many similarities, you may be unfamiliar with some of the US terminology or American residential mortgage products available.

Long-term, fixed-rate repayment mortgages are the most popular amongst US residents. Shorter term and variable interest rate deals are also available however, as are interest-only plans.

How long are the terms on American mortgages for UK residents?

The most common term for a fixed-rate mortgage is 25-30 years, but shorter terms of 20, 15, and even 10 years are also offered by some providers.

As is the case in this country, many mortgage lenders in the USA have age restrictions in place. The cap tends to be at age 75, but this will vary by lender.

What documentation do I need when applying for a US mortgage?

If you’re a British expat looking to buy a home in the USA, you will need to provide the following alongside your mortgage application:

Permanent residents

If you’re now a permanent US resident and have a Green Card, you’ll need:

  • 2 years’ worth of “W-2 forms” (equivalent to a UK P60)
  • Last month’s “pay stub” (payslip)

Non-permanent residents

If you’re living in the US with a resident visa but not a Green Card, you’ll need:

  • Last year’s W-2 form (if applicable).
  • Your previous month’s pay stub.
  • A copy of your Visa and Passport.
  • Your last 3 months’ bank statements.
  • A copy of your UK credit report.
  • A copy of the most recent mortgage statement for any property you own in the UK.

How much can I borrow for a mortgage in the USA?

Affordability is an important deciding factor in whether or not you'll be offered a home loan in the USA.

Lenders tend to calculate how much you can borrow you by setting your maximum monthly payment to 25–35% of your gross monthly income to prove you can still afford your mortgage if your circumstances change.

They may also check your monthly outgoings, for example by assessing your utility bills or bank statements, to confirm your affordability on the monthly payments.

How much deposit do I need for a US mortgage?

In the US, FHA mortgages - which come with very low deposit requirements - are available to expats with permanent residency. However, they’re harder to come by if you don’t have a Green Card or valid work visa.

Otherwise, foreign buyers with a good credit history can expect to pay a deposit of between 20-30%, depending on the lender and your individual circumstances.

As a non-resident, you may find that you are offered slightly less favourable conditions than US citizens - another reason to work with specialist USA mortgage brokers if you want the most competitive interest rates.

How do US mortgage providers assess my credit-worthiness?

It is standard practice for mortgage providers to check your credit history before authorising a loan in any country.

In the US, a credit check will be carried out and you may also be required to provide bank statements and your last three years’ worth of tax returns and / or a letter from your employer.

Proving your credit-worthiness in a foreign country can be difficult, especially if you haven’t lived there very long. In this situation, you may consider getting an international credit check to verify your records in your home country.

If your credit history isn’t squeaky clean, don’t panic. While a history of adverse can be detrimental to your application, we’ve helped plenty of customers with bad credit get a mortgage overseas - but it’s important to speak to an expert for advice.

How does my job status impact my American mortgage application?

Self-employed applicants can find it more difficult to get a mortgage due to the level of risk they pose.

Most US lenders will require at least two years’ tax returns (some may request three, others may be happy with one year’s worth), and your last three months’ bank statements.

If you’re retired, an Individual Retirement Accounts (IRA) or 401k plan is helpful in demonstrating your retirement income.

What does the American mortgage process involve?

While the exact process varies by state, the general gist is similar. This example explains how to get a non-resident mortgage in Florida, step-by-step:

  • Find an agent
    Every property on sale is represented by a “seller’s agent”, who doesn’t charge a fee and take their cut after the sale of the property. They are under no obligation to accurately describe the property to a potential buyer.
    For this reason, most experts would recommend that you hire a “buyer’s agent”, who will represent your best interests as a buyer. You don’t have to pay a buyer’s agent; they will split the commission of the sale with the seller’s agent.
  • Find a property
    All properties on sale in Florida are listed in a central database, which saves buyers the hassle of hunting around estate agents or browsing the web in search of their dream property.
    Once you’ve found one, it’s time to negotiate a price - as you would in the UK. A verbal agreement on the sale will then be made, and it’s common practice for the buyer to make a small goodwill deposit at this stage.
  • Sign a purchase contract
    A legally binding purchase contract will then be drawn up, and signed by both the buyer and seller. You will be required to pay your deposit into Escrow at this stage - (this is standard for most US property sales).
    Next, you will need to arrange for your mortgage funding to be put in place (if you haven’t already done so), so as not to delay the completion date.
  • Check the legalities
    After the paperwork has been signed, buyers in Florida use a Title Insurance company to insure it against any third-party claims. It is not a legal requirement to use lawyers in Florida, because the Title Insurance company covers all the legal aspects.
    As a non-citizen however, you may wish to bring in a lawyer who has experience in the American property market and is familiar with all the terminology, to look over the final paperwork and give you added peace of mind.
  • Completion
    You are now able to complete the sale. Provided there are no title issues or other complications, completion may be possible in as little as 4-6 weeks after making an initial offer.
    You can expect to pay around 5% of the purchase price in closing costs. These can include, but are not necessarily limited to (depending on state):

    • Documentary Stamps - $0.35 for every $100 of mortgage.
    • Intangible Tax – 0.002% of your mortgage value.
    • Local Property Tax – the equivalent of UK Council Tax.
    • Title Insurance – usually about 1% of a property’s cost (mandatory in Florida, varies in other states).
    • Title companies fees – approximately $250.

How to get the best USA mortgage rates?

For access to the most competitive USA mortgage rates, we can’t overstate the importance of speaking to one of the whole-of-market brokers we work.

Not only do they have connections with a number of top banks and mortgage brokers in the USA, they can also negotiate competitive terms with UK lenders specialising in overseas mortgages.

Working with us means you’ll receive reliable, accurate advice on the local property market, the most competitive rates from the top USA mortgage brokers, and a helping hand throughout the whole process.

Make an enquiry and we’ll put your mind at ease.

Should I use a USA mortgage calculator?

When you’re applying to get a mortgage, it can be tempting to turn to an online calculator to determine your options.

But it’s important to be aware these online tools rarely factor in every single lender’s eligibility requirements, nor do they consider your specific situation and circumstances.

This is especially prevalent is you’re consulting a mortgage calculator for a home loan in the USA, or any other overseas destination.

There are so many different tax laws and state regulations in the US that it’s rare to find an online service that will take all this into consideration, alongside the usual circumstances such as credit history, loan to value (LTV), affordability, and more.

The last thing we want to do is for you to get your hopes up and to be let down later on down the line. Contact us for the most comprehensive, up to date calculations and USA mortgage comparison services.

What other factors impact eligibility for an American mortgage?

The above information applies to non-citizens seeking residential mortgages or holiday homes in the USA. However, there are different requirements if your property purchase is an investment:

Buy to let USA properties

If you’re planning to stay living and working in the UK but want to buy property as a buy to let investment (known as “buy to rent” in the US), you can still qualify for a US mortgage.

You can do this by using a foreign national loan for investment properties. However, you will be expected to pay a much larger deposit, and interest rates tend to be far higher than you’d expect with a residential mortgage.

To apply for a mortgage on a buy to let property in the US, you’ll need to provide:

  • Last 3 months’ bank statements
  • Most recent UK mortgage statement
  • UK credit report
  • A copy of your passport
  • Employer’s reference/proof of income or audited accounts for self-employed buyers
  • As long as you can meet the standard affordability criteria, you should be able to get a US mortgage while living in the UK.

Commercial mortgages in the USA

If you want to buy property in the US for your own residential purposes, a holiday home for example, you would apply for a second residential mortgage as usual. However, different rules apply if you’re seeking funding on a property being used for commercial purposes.

It’s advised that you approach a broker or company specialising in commercial mortgage loans for access to the most competitive rates, which will be calculated based on your individual circumstances.

Again, it’s likely that you’ll need a much larger deposit together for commercial mortgages, but you do benefit from being able to borrow far greater sums of money, on a secured basis.

How does the US mortgage process vary by state?

It is not unusual for mortgage requirements to vary depending on whereabouts they are in the country. Some of the most common queries we receive on mortgages in the USA relate to:

Florida mortgages for UK residents

If you’re a foreigner seeking a mortgage in Florida, you’re in luck; a number of new mortgage products have recently been introduced in the Sunshine State with overseas nationals in mind, and there are plenty of willing lenders available.

So if you’re looking to add a new investment to your property portfolio, there are some very attractive mortgage loan interest rates available in Florida, for a number of different property types - even for non-residents.

To get the most bang for your buck, make sure to contact a specialist Florida mortgage broker who is in contact with both high-street and private lenders, and will calculate the most competitive rates based on your specific circumstances.

For a mortgage in Florida, you will generally need a deposit of around 20-30%, which will be secured on the property you’re buying. Most Florida mortgages are issued on a repayment basis, with terms ranging from 10 to 30 years.

Mortgages in Miami

This sunny Florida city is full of culture and diversity, and home to plenty of popular holiday destinations. It’s easy to see why many overseas citizen are seeking a mortgage for a Miami home.

As with the rest of the state, there are a number of different mortgage providers offering competitive rates who are happy to consider lending to non-citizens or expats for a property in Miami.

Be warned, though: if you’re planning on purchasing a holiday home to rent out, it’s important to check the seller’s rental permissions. Some states, including Florida, have restrictions on buying property intended for holiday renting - especially in top holiday spots such as Miami.

If you’re not sure whether these laws will affect your property purchase, get in touch and we’ll refer you to a specialist Miami mortgage broker who can answer any questions you may have.

Los Angeles mortgages

The second most populous city in the US, Los Angeles is another sought-after living destination for Brits. As the cultural, financial and commercial centre of Southern California, there city presents plenty of opportunity for residents.

The cost of living in LA is high, especially in certain areas. Despite this, properties tend to be snapped up very quickly. For non-citizens the mortgage process can be complex, and there are few restrictions on foreign buyers.

For one, a good credit score is required, and you’re best chance of getting a mortgage in Los Angeles is to open a US bank and make tax returns.

It’s also strongly advised that you seek the advice of an overseas mortgage broker who will put you in touch with lenders who have experience in securing mortgages for non-citizens in LA. This will ensure you access to the best rates, and reduce the likelihood of any credit check complications occurring.

New York mortgages

Many UK citizens dream of residing in the hustle and bustle of the Big Apple, and with a population of nearly 8.7 million, it’s safe to say that New York City is a highly sought-after location - despite the high cost of living.

It is certainly possible to get a foreign national mortgage on a New York property, and a significant portion of New York real estate already belongs to foreign nationals and corporations.

Many banks have special programs for non-residents who wish to buy in New York. Usually, non-residents and expats can borrow a maximum of 65-75% of the property’s value.

When it comes to finding a lender, your best bet is to contact a mortgage broker specialising in New York property.

This state has the highest average mortgage rate in the country, so working with an expert means you receive expert advice throughout the process, are aware of local tax laws, and access to the best interest rates.

Why speak to a USA mortgage specialist?

Whether you decide to take out a mortgage with a UK or US lender, the process is slightly more complicated when it comes to overseas property purchases.

This is why it’s so important to seek expert advice to guide you through the process.

Before you commit to anything, consider the following:

  • Tax liability - Ensure to account for any tax you’re liable for, both in the UK and the US. Even a minor oversight could set you back hundreds, or even thousands of dollars, in missed payments and fees.
  • Check the legal documentation - Go through all contractual agreements with a fine-toothed comb. It is advisable for a lawyer to be present at these times to make sure all the necessary permissions, licenses and planning consents are in place.
  • Exchange rate changes* - The exchange rate between the pound and dollar is prone to fluctuation. If your mortgage is in dollars, expect the payments to go up and down in line with the exchange rate.Fortunately, the lender is obligated to tell you if the exchange rate fluctuates by more than 20%, and give you the option to repay the in another currency if this is the case.

*If you’re a British expat receiving your income in dollars, this will not apply.

Tips when buying overseas property

If you’re making a property investment overseas, it’s especially important that you seek legal and financial advice from a lawyer that is independent of everyone else involved in the process. This includes the seller, developer and estate agent.

If you’re appointing a UK legal firm, it’s a good idea to check that they’re registered with the Law Society in the UK and specialise in international transactions and property conveyancing before you proceed with the deal.

Why you should speak to a whole-of-market broker if you’re getting a mortgage in the USA

We’ve helped over 88,000 people find the right mortgage, even for buyers who have been declined a mortgage or have bad credit history.

What’s more, our customers rate us 5 stars on Feefo, mainly due to our high levels of service, but also because we offer offers a 5-star service with access to expert brokers who are:

  • Whole of market.
  • Can offer bespoke advice to customers buying in the UK or overseas.
  • Have a working relationship with all lenders, including those who offer international mortgage products in the USA.
  • Already know the lenders to go to as they have successfully arranged residential, commercial, BTL and holiday home US mortgages.
  • Are OMA Accredited advisors.
  • Have completed a 12 module LIBF accredited training course.

Talk to an American mortgage expert today

For information on overseas mortgages, and for access to the best mortgage rates in the USA for your circumstances, call Online Mortgage Advisor on 0800 304 7880 or make an enquiry.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee, and there’s no obligation or marks on your credit rating.

Updated: 4th July 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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