Receiving mortgage approval is a very important step in the process of buying a home with financing. For years, international investors and non-US based property buyers were forced to buy property in full cash. Now, with advancements in technology and with the help of USA-Mortgages, non-US based real estate investors can receive access to financing. This can help smaller investors access residential real estate in the US or larger investors create a fully-fledged portfolio.
While international investors can now receive financing for a property, the required documentation is slightly different. This is due to differences in banking in different countries and their regulations. While the process for international investors is somewhat similar to that of U.S. residents there are a few minor differences.
Proof of Assets & Liabilities
International investors will need to provide proof of assets and list liabilities. As for assets, this can include other properties owned, stocks, bonds, mutual funds, and other investments. Bank statements in their country of residence are also required.
Liabilities refer to any open debt that an individual may have accumulated over the years. This can include child support payments, open loans, car payments, and other recurring debts.
Proof of Income
All lenders want to make sure that a borrower has a steady source of income. Many mortgage applicants tend to be employed by a company. As such they will be required to provide copies of their pay slips from their place of employment as far as 3-6 months back. In addition to that tax returns, and supporting documents may be required. This not only proves that the borrower has a steady income but also verifies their employment.
Things are a bit different for international property investors that are business owners or self-employed. In order for them to get approved, a financial report on their business activities and supporting documents are required.
Mortgages aren’t too different from other loans, and having good credit can vastly improve your terms and rates.
While international investors may not have an established credit history in the United States, they likely have one in their country of residence. Most lenders in the US either find it very difficult or are unable to carry the required credit checks on non-US based borrowers. Property buyers who aren’t based in the US should consider applying with a specialized lender.
With a specialized lender, international investors will need to provide both a credit report and credit history from their country of residence. Should both be above standard rankings, the likelihood of getting a mortgage loan approved will increase. Having good credit could also lower the mortgage’s rates.
Proof of Identity
Every lender needs to make sure that the borrower is who he claims to be whether they’re US-based or international. As such usually two types of identification are generally required. This can take the form of a driver’s license, ID, and passport. This is also required to comply with AML or anti-money laundering regulations.
US-based investors are also typically required to provide their social security number. Since international investors probably won’t have a US-issued social security number, other documents are required. This usually takes the form of a credit report and bank statement, although at times more documentation is required.
Once the borrower provides all the required documentation, the lender will now consider the application. The time frame to get approval can take 10 to 14 business days. All the borrower will need to do if approved is simply close the deal and purchase the property!