As a foreigner to get a loan for housing in New York: instructions and pitfalls - ForumDaily
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As a foreigner to get a loan for housing in New York: instructions and pitfalls

Obtaining a loan for a foreigner in the United States has become overgrown with a lot of myths - many tourists and immigrants are sure that it is impossible to buy real estate on credit in America without a green card. In fact, everything is simpler. If you have recently arrived in the USA, then you have every chance not only to take out a loan on almost the same terms as Americans, but also to receive a number of benefits compared to immigrants who have lived in the country for a long time.

Фото: Depositphotos

How to do everything correctly and what important points need to be considered before you make a deal to buy real estate with the financing of an American bank, said a licensed real estate agent in New York Dmitry Stasyuk for YouTube channel Emigrantvideo. Note that the expert talks about the laws of the state of New York - in other states, conditions may differ significantly.

Why is it profitable for a foreigner to take a loan in the USA

If you compare a foreigner with an American or an immigrant who lived here for a while and officially showed his income for several years, the foreigner will have more advantages.

It is better to start shopping immediately after arrival. When you start working in the USA, it will be more difficult - the bank will require an American credit history for several years, statements of income from work in American companies. It may take 3-4 years before you develop enough “financial credibility”. When you first arrive, the bank views you as a foreigner who is buying a second home so that he can come to America as a tourist and not stay in a hotel. It's much easier and faster.

How a foreigner can get a mortgage in New York

As a rule, specific banks specialize in specific areas, some work mainly with buyers of apartments, some specialize in houses.

Any solvent person who can confirm their financial status and the absence of a dubious background can apply for a mortgage. The applicant must meet the requirements requested by a particular bank. As a rule, this is: availability of money for a down payment; a certain income that will show the bank that the person will be able to pay utility bills for the apartment and make payments on the house. Some financial programs have a lower limit - for example, from 100 thousand US dollars.

Фото: Depositphotos

Where to begin

You must have a passport, a US visa and you must be in the United States at the time of application. First visit the bank to find out the specific conditions and see if they will give you a loan at all. After studying your situation and documents in a few days, the bank may issue you a document called pre-approval. With this paper, you can already search for specific housing options for mortgages. The document will help a lot, because if you buy housing with bank financing, the seller must see that the bank agrees to go for it.

There are certain banks that work with foreigners, they have special programs. The most popular banks offering this service are Citibank and HSBC, as well as Chinese banks, which consider all applicants.

The standard terms of the initial contribution - 30-40%, sometimes consider the option 25%. The money must be in the account in the American bank or in the bank of the applicant's home country. It is important to know that the amount in your account must be greater than the specified percentage. As a rule, it includes:

  • required down payment;
  • the amount that 12 will cost in months of payments to the bank and house;
  • closing amount - 2-4%.

Realtor services are free - they are paid by sellers. Until the deal is finalized, you, in fact, do not pay anything at all except money for the services of a lawyer who will prepare all the necessary documents, but compared to the cost of the apartment, these are small expenses. Not a single deal is closed in New York without a lawyer - he checks the purity of the transaction, whether there are any restrictions on the real estate, and takes responsibility for the entire documentary part. The cost of a lawyer’s services starts from 2 thousand dollars, depending on the amount of work. The average price is 2-3 thousand.

How is bank checking

You will need to bring bank statements, a certificate from the company you work for, and fill out a form with additional information - for example, how long have you been employed, what other assets do you have, etc. The bank makes inquiries, including international ones, to check how true the information is, to make sure that you are not on the lists of debtors at home, on the lists of Interpol, terrorists, etc. This usually takes several days.

When the bank asks what money is in your accounts, it will take into account that this money must be there for at least 3 months - therefore, in this case, it will not be possible to deposit money and immediately withdraw it. It is important for the bank to see that you did not borrow the money, it is yours personally. Until the transaction is closed, the bank will monitor movements in the account and require confirmation and explanation for each relatively serious amount.

The bank tries to verify as much information as possible: it will call the job you indicated in the certificate, contact the bank whose data you provided in the financial status certificate, and will try to confirm through all possible channels your solvency and lack of criminal history. The bank is interested in you paying - and as long as you pay, there will be no special questions about what your real income is.

Фото: Depositphotos

What do standard credit terms look like?

There is practically no difference in the percentage of the loan for an American and a foreigner. For example, you take a loan for 30 years, the average rate will be 4-4,5%. You can fix the rate for the entire term or for several years (in the second case, the general conditions may be more profitable). The bank is not entitled to raise the interest rate during the period specified in the contract.

It is important to know that the bank may refuse to purchase a specific apartment if it finds problems - sometimes this happens at the last moment. That’s why you need a lawyer so that you don’t sign up to buy an apartment and suddenly be left without financing.

From start to finish, applying for a loan for an apartment or house takes at least a month, on average about two: you contact the bank, after a few days it issues you a paper, you look for an option, then sign an agreement, the bank also starts checking the apartment (all whether the property rights are in order, whether there are any financial problems with the house), and issues money.

How much will the bank

Banks are ready to give foreigners no more than 3 million dollars, to which, however, you can add your own money and buy housing - there is no upper limit on the purchase.

New laws for wealthy foreigners: if you are the owner of a large company and you have more than three million dollars to buy an apartment in Manhattan, according to the new rules you will now have to disclose the name of the individual owner, although previously most businessmen purchased such property in the name of the company.

If you stopped paying on a loan

In America there is a very simple system of influencing debtors. Firstly, the bank has every right to demand that the defaulter close the loan in a short, time-limited period. Secondly, he has the right to very quickly sell your house under the hammer, for which you paid all previous amounts. And if you are not sure that you can pay the monthly installments, it is better not to get involved in a loan. In the USA, it does not matter how many young children will be registered in the apartment - keep this in mind.

It is also important to know that the purchase of real estate will not help you become legalized in the USA and will not contribute to obtaining a visa, unlike in many European countries.

Read also on ForumDaily:

Moving to the USA: work, pitfalls and the American dream

How long does it take to buy a house in different US cities?

Immigrant guide: how to rent affordable housing in New York

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