Usa Mortgages

Mortgages in the USA are widely available to foreign buyers as well as citizens. Terms such as ‘points’ need to be understood as well as the implications of repayment and application costs.

Requirements vary from state to state and therefore the information must be considered solely as a guideline in principle to mortgage applications in the USA.

Most agents and brokers agree that it is advantageous to consult a mortgage broker and pre-qualify before looking for your property. Pre-qualification will enhance your credibility in the eyes of agents and sellers as well as assisting in speeding up the purchase process.

Down Payments

The majority of USA mortgage companies require a down payment of 20% for non-USA residents with proof of employment or documentation to confirm proof of income for the self-employed. In general the higher the deposit, the easier the process and the fewer proof of income documents are needed. Proof of the source of income has become an additional requirement since September 11th.

Choosing a Mortgage

The right type of mortgage for you depends on various aspects:

Your existing financial circumstances
Whether you expect any future changes in your finances
The length of time you intend to keep the property
How you feel about fluctuations in the mortgage repayments

A fixed rate mortgage over a period of say 15 to 20 years could save many thousands of dollars over the period of the loan, but repayments are higher. On the other hand an adjustable rate mortgage may start with lower monthly payments, but these will obviously change if interest rates go up.

Documentation Required

The final purchase contract for the property (if applicable)
Proof of income pay slips for the last year. These should be computer generated or originals to that identify the employer and employees name.
If you are self-employed personal and business tax returns for the last two years.
Account numbers for al bank accounts
Information about all debts including credit card account numbers

Escrow Account

Mortgage lenders often set up escrow accounts to cover payments of costs such as property taxes, local taxes and property insurance premiums. They ensure these bills are paid in a timely fashion and help the homeowner to avoid the pitfalls of unpaid bills.