If you’re wondering about foreign national loans, here are some things you should know:
In order to qualify for a foreign national loan, you must be living outside of the United States, and your income must come from outside of the United States too. Not only that, but you can’t move to the US, either. These loans aren’t meant to help you make the move from your home country to the US.
What foreign national loans are good for, are investment properties. A lot of times, people with the capital to invest in another home prefer to do so in a country that gives them greater return for their investment—like in the states.
Unlike conventional or FHA loans, where you can opt to put as low as 3% to 3.5% down—foreign national loans require larger down payments. Normally, you’ll be asked to make a down payment ranging from 25% to 40%. Interest rates on these loans tend to be higher on average, but if you’re considering buying a property outside of your home country—chances are that you have enough capital for this to not stand in the way of your purchase.
To qualify for a foreign national loan, you’re going to need a:
Credit reference letters help lenders determine whether or not they should lend you credit based on your past relationship with another business. They’re also used instead of a FICO score, which most foreigners don’t have.
Buyers will also have to make sure that they transfer their funds to a US bank account. Lastly, they’ll need to verify where their funds are coming from with an income verification letter. Once you’ve got these three things and your down payment, it should be smooth sailing.
One last tidbit that I’ll leave you with—not all banks offer foreign national loans. That’s because lenders have to verify the legal residency of the applicant. Because foreign nationals don’t conform to the guidelines that Fannie Mae and Freddie Mac request, banks take on the risky loans themselves. It’s the whole reason why down payments are higher. Banks want to make sure that you can pay up, and because of that, some aren’t willing to take the risk.
That’s exactly why you should pair up with a mortgage broker. We’ll be able to help you find a lender that’ll accept your request for a foreign national loan. Get started on your investment journey here in the US!