MORTGAGE LENDING IN THE US

What is a mortgage in the United States for residents of Russia and the CIS today? The most important thing is very favorable and affordable conditions for its receipt, a low interest rate, clear responsibility for the loan.

Being afraid to take a mortgage loan abroad, comparing it with the Russian mortgage is fundamentally wrong. The Russian mortgage can be called a consumer loan for the purchase of real estate, there is no mortgage lending in Russia.

When you receive a real mortgage , you, as a borrower, must answer only with real estate; when receiving the same “mortgage” in Russia, the borrower must respond even with the property that he already has. However, the fact that Russians and CIS residents do not want to use mortgage lending abroad is explained not only by ignorance. Many Russian clients prefer to pay cash when buying property in the US, for which they are very fond of American brokers. With this method of payment you can quickly get the most profitable and interesting objects, the cost of which over the past few years has dropped to a minimum value, and even get an additional discount.

But still a certain percentage of buyers need a mortgage. These are, as a rule, clients who invest the freed cash capital in other objects or for some other reason do not wish to withdraw funds from their assets or business.

Investing in real estate without resorting to mortgage lending does not make sense. Income from renting real estate acquired for cash is exactly the same as from government bonds, but the liquidity of the latter is much higher ..

HOW TO GET A CREDIT?

Non-residents of the United States, providing the necessary package of documents and making a down payment of 30%, can get a mortgage loan for up to 20 years. American banks issue loans to foreign buyers for a period of 5 to 30 years, while the interest rate is very close to that provided for US citizens – about 5%.

GNY can easily solve a customer’s difficult task — to prove the legitimacy and stability of income. Even if you have consistently good earnings, it is not always possible to provide a documentary explanation of the origin of money. That is why our company exists – in order to tell you how to act correctly.

In order to apply for a mortgage loan in the United States, you will need to collect a large package of documents, as well as have the necessary amount for the down payment. In accordance with the recommendations of the American Mortgage Association (Mortgage Bankers Association), a potential borrower must have an amount from 10% to 25% of the value of the acquired property. He also needs to have an open US visa to enter the United States.

The basic package of documents includes:

  • reference letters (one or two) from a foreign or American bank, which confirm cooperation with a client for a period of at least 2 years;
  • credit history from a US or foreign credit bureau;
  • confirmation of the presence of the amount necessary for the initial payment on the account, for carrying out the transaction within a maximum of six months from the moment of the conclusion of the contract;
  • certificate of employment confirming certain fixed income, or financial statements, if the borrower has its own business;
  • other documents for the conclusion of the transaction (contract, confirmation of the transfer of funds, etc.).

It should be borne in mind that banks apply an individual approach to each potential client, therefore the package of necessary documents is formed individually, depending on the specific circumstances.

The redemption rate in the USA is calculated using two main models: a fixed or a floating rate. The repayment period is usually 15 – 30 years. A variable rate mortgage loan is more profitable for banks and is therefore a popular practice in the USA. Credit organizations themselves determine and change the size of rates, tying them to the quotes of the bonds of the US Treasury, the LIBOR rate, etc.

Among the many models for calculating floating rates, the most widely used hybrid model is when a borrower pays a minimum fixed rate for a certain number of years (usually from a year to 10 years), and in the remaining repayment period (an average of 15 to 30 years), changes with a certain frequency. For example, the expression “5/1” says that 5 years of payments go at a fixed rate, and after the rate changes once a year.

GNY assures you that a mortgage loan is a test not only of the borrower, but also of the property. And if a mortgage loan is issued, then the bank is confident in the liquidity of the acquired property. And, therefore, the mortgage for Russians and citizens of the CIS is also convenient, as well as for residents of the United States. You just need to want to take advantage of their capabilities and services of a reliable company.