How to get mortgages in the USA as a UK resident
Purchasing property in the USA is never a bad idea if you can afford it, as it can be a great investment that will continue to grow in the years to come, but unfortunately, if you don’t live in America, getting a mortgage loan for a property in the USA can be a long, difficult process if you don’t have some knowledge of the mortgage market there.
Thankfully, our mortgage brokers specialise in providing our clients with this information at Loan Corp, so you can get a home loan that will suit you.
We can get you approved in just 24 hours for a mortgage in the USA, start online below:
Can foreign nationals get a mortgage in the USA?
Thankfully, the simple answer is yes, the US government has made it incredibly easy for foreigners to purchase property in the country, and you could be the owner of a new US home in as little as a few weeks.
While the process is significantly easier if you are a UK expatriate with a work visa or green card, it is still possible for UK residents to purchase property in the USA, even if they don’t intend on living there full time.
Types of mortgage loans available
The US has a well-developed mortgage industry, meaning there are many mortgage products to choose from.
This can become confusing, which is why you should enlist the help of a mortgage broker or a company like Loan Corp, as they will help you get the best mortgage rates and interest rates.
Fixed-rate mortgages
A fixed-rate mortgage loan ensures that you will have the same interest rate applied to your borrowed capital.
These mortgages aren’t as common in the USA anymore, but they are a sensible option, as you won’t have to worry about any interest rate fluctuations affecting your mortgage payments.
Adjustable rate mortgages
Adjustable rate mortgages are relatively self-explanatory, as your interest rate will fluctuate. This is because your interest rate will be based on the national interest rate.
Mortgage lenders are often more keen to offer you an adjustable rate mortgage, but this is not always bad, as the interest rate can also dip, saving you money.
Hybrid mortgage loans
Hybrid mortgage loans are a combination of both of the abovementioned mortgage products. You might be offered a fixed interest rate for a few years before your mortgage reverts to an adjustable-rate mortgage.
What are my borrowing options?
If you consult with a mortgage broker, they will likely list all of the borrowing options you can choose from and then help you decide which option will be best for you.
International lender
Borrowing from an international lender with a UK presence is one of your options if you want to purchase a home in the UK.
Unfortunately, not all of these lenders will be able to provide you with a mortgage in the USA, so you should do your research beforehand.
International lenders may not know much about the property market in the country you want to purchase a home, so be wary and consult with a company like Loan Corp first.
International lenders will often allow you to pay for your USA mortgage in your home currency, which can help protect you from fluctuations in the exchange rate.
Remortgaging your UK home
Another option available to you if you want to purchase a home in the USA while living in the UK is remortgaging your home in the UK and purchasing your US home with cash.
This can make your monthly payments incredibly easy to deal with, as you’ll be dealing with a local bank, and your payments can be made in Pounds.
One of the problems with this option is that it won’t be a great idea if you still owe a lot of money on your home, as the bank may not allow you to remortgage your home, or your monthly payments could become unaffordable.
If you own your UK home outright, then this should be an option to consider.
USA mortgage lender
You can still apply for a mortgage from a US mortgage lender even if you aren’t a citizen and don’t work in the country, although it might be slightly more difficult.
Mortgage loans also tend to work slightly differently in the USA, so you should be aware before diving head-first into one without consulting a mortgage broker.
How do mortgage loans work in the USA?
Below we will discuss how some aspects of the US mortgage market differ from the UK:
Terms
Most mortgage lenders will offer terms between 25 and 30 years on fixed-rate mortgages, but some lenders also offer shorter terms ranging from 20 to even 10 years.
Most lenders will also not offer mortgages to people over the age of 75, as a 20 to 30-year term will not be realistic, as the majority of people don’t live that long!
If you have the capital to do so, it is generally better to go for a mortgage with a shorter term, as you will be charged less interest by the time your term is up.
Longer terms will reduce your monthly payments but will also cost you more in the long run, as you will be charged more interest.
Documents
The documents you will need to hand in alongside your mortgage application will differ, depending on whether you are a US resident and have a green card or not.
If you have a green card, you will need to bring the following:
- Your payslip from last month
- 2 years’ worth of W-2 forms
If you don’t live in the USA or aren’t a resident, then you’ll need:
- Your payslip from last month
- Copies of your Visa and passport
- Your W-2 form from last year
- A copy of your credit history from the UK
- 3 months of bank statements
- A copy of your most recent mortgage contract from a property you own in the UK
Loan amount
The amount you will be able to loan from a bank or another lender will usually need to be calculated.
One of the ways lenders do this is by setting your maximum possible monthly payment amount to between 25 and 35% of your gross monthly income.
The amount you can repay each month will determine how much you can borrow.
How does the American mortgage process work?
The mortgage process in the USA usually differs from state to state, but the general process is relatively similar.
Below we will list the steps you’ll need to follow to receive an American mortgage.
- You will first need to find a buyer’s agent to help with negotiations with the seller’s agent. You won’t need to pay this agent, as they will split a commission with the seller’s agent.
- Once you have found an agent, you will need to find a property that you would like to buy. You can approach a real estate company or find one on the internet. When you’ve found a property you like, you and the seller can negotiate the price.
- When you and the seller have agreed on a price, a purchase contract will be drawn up that both you and the seller will need to sign. You will also need to pay your deposit into Escrow to show that you are serious about purchasing the property.
- Once you have signed all the paperwork, it would be a good idea to get an American property lawyer to review everything to give you peace of mind. This can ensure that everything that took place was above board.
- Once all of these processes are finished, and everything checks out, you’ll be able to complete the purchase of your new property. You will likely need to have cash on hand to cover all of the fees and taxes that come with purchasing a home in the US, so don’t be shocked if you are presented with these bills.
FAQS
How long does mortgage approval take in the US?
The mortgage process is much quicker in the USA than in many other countries, and your mortgage will likely be approved within 2 to 6 weeks.
What are the three different types of mortgages available in the US?
You can choose between a repayment mortgage, an interest-only mortgage, and a combined rates mortgage.
What is the difference between a mortgage and a home loan?
A home loan is a loan that provides funding for you to help upgrade, construct or buy a residential property. On the other hand, a mortgage loan is a loan taken with a property as collateral.
Looking for an overseas mortgage in another country?
We can get you mortgages in the following countries:
- Mortgages in South Africa
- Mortgages in Ireland
- Mortgages in Canada
- Thailand mortgages
- Mortgages in the Netherlands
- Mortgages in Monaco
- Mortgages in Portugal
- Mortgages in Gibraltar
- Isle of Man mortgages
- Isle of Wight mortgages
- View all overseas mortgages here
Get Mortgage Advice From Loan Corp Today
If you want to purchase a home in the US but aren’t sure how to go about it, then you could do with some expert advice.
Thankfully, that is exactly what we offer at Loan Corp, so stick with us, and you’ll be in good hands.