U.S. tax returns or a credit report, even very affluent foreign buyers are unable
to secure banks loans on properties in the U.S. Most U.S. banks simply do not
lend to foreign nationals seeking to buy investment properties in the U.S.
there are banks, both in the U.S. and abroad, that offer loans to foreign
nationals, they still require foreign buyers to produce foreign tax returns and
other financial statements. The application and approval process can be lengthy
for foreign national loans. Not to mention the high down payment requirements
of bank lenders on loans for foreign nationals. Most banks want a 40-50% down
payment on purchases of properties in the U.S. by foreign borrowers. This is a
huge down payment!
order to take advantage of good deals, buyers in the current market are forced
to move quickly to close on their purchases. In most cases, foreigners are
buying discounted real estate at trustee sales or at FDIC auctions, which
warrant an even faster closing timeframe. Many foreign national buyers have
relied on the availability of private money loans, or hard money loans, as they
are sometimes called. Because most private money and hard money lenders don’t
care whether a borrower is foreign or not, private money loans have been much
easier to obtain than a bank loan for foreign nationals.
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The Blogs on Trulia are a good resource for professionals in
Getting a bank loan these days requires a lot of time and
patience. Thirty to ninety day funding windows are the norm, so if you have a
need for speed you may be out of luck. As home prices continue to rise, and
interest rates remain historically low, many people wonder if banks will loosen
their stringent lending standards in 2013.
The answer is no. Mortgage underwriting standards are largely
dictated by Freddie, Fannie, and the FHA. Not only is every file scrutinized on
the front end, but auditors on the back end are looking for any error or
non-compliance item to use to fine you or even put you behind bars. Most
mortgage brokerages can tell you that they receive at least one notice per day
from the NMLS about a new regulatory or compliance item. Many mortgage brokers say
they may need to hire an attorney to be in-house in order to comply with so
many new requirements.
If you need a loan quickly, you may opt for private money as an
alternative. Private money and hard money lenders can underwrite and fund loans
quickly to allow you to take advantage of opportunties that may not be around
long enough for a bank approval. Be prepared for even more stringent bank
underwriting requirements in coming years, as banks will have to comply with
international bank standards imposed by the Basel III. These new requirements
may even threaten to put local and community banks out of business. Read more
about that here: http://www.trulia.com/blog/coreycurwick/2012/11/new_banking_standards_may_put_community_banks_out_of_business
To learn more about our private money loans for your real estate
purchases and refinances, click here: http://privatemoneyutah.com/loan-programs/
Posted by Corey Curwick Dutton on November 13, 2012