Who is making mortgages to foreign nationals?
By Patricia M. Gonzalez
Before the U.S. real estate bubble burst at the end of 2007, foreign nationals had a variety mortgage options. Back then Fannie Mae, Freddie Mac, as well as an array of private mortgage investors were
purchasing mortgages made to foreign nationals.
Now that these secondary market players stopped purchasing foreign national loans, fewer mortgage options exist for foreign nationals.
This means that foreign nationals interested in purchasing real estate in the United States may have to look harder to find mortgage financing. It means most likely they will discover that only banks or other institutions willing to hold these mortgages on their balance sheet for some time will offer mortgages to them.
Most realtors, real estate attorneys and title agents are familiar with local banks that specialize in making mortgage loans to foreign nationals. These professionals can be a great resource in locating banks that can help and to warn about the ones that cannot.
Local banks that specialize in financing to foreign nationals typically require a down payment or deposit of between 30% to 50%, depending on the dollar amount of the mortgage. Most will offer mortgage rates fixed for a defined initial period which subsequent to the fixed period become variable, much like mortgages found around the world. Some even offer an interest rate fixed for the entire term of the loan, although these loans can contain shorter terms which would result in a higher monthly mortgage payment.
In addition to historically low interest rates which are usually well below rates in their country of origin and very reasonable real estate prices, foreign nationals can also borrow up to $3,000,000 or more in some cases. Foreign national mortgages can be made for vacation homes as well as investment property.
Patricia M. Gonzalez – Mortgage Banking Officer – NMLS# 648001– (305) 799-5328
City National Bank – voted Best Banking for Jumbo Loans by the readers of the Daily Business Review.