The Mortgage Go To Guy!!

In an effort to help my Foreign National clients buy Real Estate in Florida with confidence, I am creating this quick and easy chart for Mortgage Programs.

Based on the lenders that will lend to Foreign National buyers in Florida here are the Documentation Levels and the Loan to Values to consider.

NO DOCUMENTATION / Stated Income Stated Asset

There are two strong lenders that will lend with Stated Income Stated Asset or No Documentation for Foreign National Buyers.

They are both Portfolio Lenders which means that they lend their own money and service the loans themselves. When this happens, the Lender is particularly strict on appraised values. Sometimes they send their own internal Appraisers out. Be prepared for the value to come back lower than expected.

For No Documentation Loans you can expect:

• 65% Loan to Value on Single Family Homes only
• 60% Loan to Value on Single Family Homes, Condominiums and Townhouses

This means you will put down a deposit of 35-40%.

Benefits of this type of program:

• All you need is a valid passport
• Valid Visa not always required
• No US Credit Required
• Payment Options including Interest Only
• Quicker Underwriting due to lack of documentation to translate
• Geographic Restrictions relaxed

Negatives:

• Appraisals often undervalued
• Low Loan to Value
• Limited Property types (no condo-hotels, no short term rentals)
• Possible limitation to number of US properties they can acquire

Rates on No Doc Loans run from 7.5-8.5% depending on the lender.

Stated Income

There are not a lot of lenders that offer a Stated Income Verified Asset program for Foreign National Investors. What you can expect is:

• 65-70% Loan to Value / Deposit of 30-35%
• Requirement of Valid Passport and Visa
• Potentially International Credit Report required
• Letter of Verification of Employment from Employer or Self Employment from Attorney or Accountant
• Letters of Credit from Lenders or Banking Institutions
• Verification of Bank Statements
• Verification of other Investment Assets

Rates on Stated Income Loans run from 7-7.75% depending on the lender

Full Documentation

The majority of Lenders require documentation that detail a Foreign National’s financial profile including:

• Credit - Should they lend to the borrower?
  • Has credit been extended?
  • Has the borrower paid on time?
  • How much credit has the borrower been offered?
  • If not, or if the borrower has had a bad credit issue in their home country, they might have to bring more money in the down payment and use a No Doc Loan.
• Income - Is the Borrower Able to repay the loan?
  • What is the annual income before and after taxes of the borrower?
  • What other forms of income will the borrower have?
  • Will the property itself generate income? how much?
  • If the borrower is self employed, can a third party professional verify their income?
• Assets - Has the Borrower used their income to create more wealth?
  • Does the Borrower have any other investments?
  • Does the Borrower have any other real estate properties?
  • Are funds in the US seasoned (in a US-based bank account for 30+ days)
• Employment
  • Does the borrower have a stable job history?
  • Is the borrower earning income from a job?
  • Is the borrower self employed (do they own their own business)? can this be verified?

Positives of this approach:

• Better Rates
• More lenders available
• Potential Ability to invest in more properties
• Straight Forward Approach

Negatives of this type of documentation:

• More scrutiny of the borrower’s financial history
• Must have a valid Visa (some may not require)

This loan type will be available with 70-75% Loan to Value / 25-30% Deposit…

Rates for this type of documentation range from 6.5-7.25%

Full Documentation PLUS

This is by far the most documentation that can be requested of any Foreign National Borrower

This type of program includes everything from Full Documenation… PLUS:

• International Credit Report Required
• Tax Returns from Country of Origin (translated to English!)
• Valid Visa required

The benefits of this type of loan:

• The best rates available to Foreign Nationals
• Highest Loan to Value
• Few restrictions

The negatives of this loan:

• High documentation means the Lender has that many more opportunities to find an issue with the borrower
• International Credit Reports are not always easy to obtain
• Student Visas may disqualify borrower

Loan to Value - 75% / deposit 25%

Rates for this type of documentation are 6.25-6.75% - similar to lending for US Citizens!

For more Foreign National and Foreign Investor information, follow this link to the Foreign National Archive
for links to all my articles -o-> http://themortgagegotoguy.com/category/foreign-national/

David Podgursky - Realtor and Mortgage Broker - can assist Foreign National Investors
with all of their Real Estate and Mortgage needs in Florida from buying to financing and beyond
** CALL OR EMAIL TODAY for the best possible service for all your real estate needs **

note: rates and terms are subject to change at any time. these rates are for illustrative purposes and are valid as of June 9, 2008… this post is not a guarantee of loan availability nor a guarantee of funding. This post is not a commitment or pre-approval. all rates, terms and conditions are subject to lender approval.

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David A. Podgursky, MBA
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