Obtaining a US mortgage

USA Mortgages

Fortunately, the US mortgage industry is reasonably advanced offering a range of different options for foreign purchasers. However, any mortgage obtained in the USA will be in US dollars, which can cause budgeting difficulties for those whose income is in sterling or some other currency.

Obtaining a US Mortgage

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Obtaining a US Mortgage
Fortunately, the US mortgage industry is reasonably advanced offering a range of different options for foreign purchasers. However, any mortgage obtained in the USA will be in US dollars, which can cause budgeting difficulties for those whose income is in sterling or some other currency.

Foreign Mortgages
Overseas investors looking to obtain a US mortgage are relatively common in the American mortgage market. As such, the terms and conditions remain reasonably uniform across all providers.

One common condition that must be fulfilled is the requirement for a larger deposit than is usually the case in the UK. Typically, the deposit is at least 20 percent of the value of the property, although this can be as much as 35 percent for some providers.

Mortgages are available in varying terms from 5 years up to 30 years, depending on the age of the borrower. In order to obtain the best possible interest rates and repayment terms, it is advisable to have a sufficiently large deposit readily accessible; this allows you to approach the providers that offer the best value, long-term.

Sterling Mortgages
Whilst it is possible to obtain a US mortgage in US dollars, it is also possible to consider a US mortgage in sterling. This is a relatively common offering in the US; but, it is not generally a well understood concept. Quite simply, a sterling mortgage is a mortgage that is obtained through a US or international mortgage provider to purchase a property in the US, but the mortgage is repayable in sterling.

This type of mortgage has several advantages for a UK purchaser. Firstly, it offers the borrower the convenience of knowing how much, in sterling, the mortgage is going to cost, on a monthly basis. Secondly, it prevents the borrower having to deal with the vagaries of the currency exchange market. One of the prime dangers of having a foreign mortgage is that if you are paying in a currency other than sterling, you may find that your payments vary, monthly, depending on the exchange rate.

For example, if you have a mortgage of US $400 a month, the value and the amount payable may fluctuate up or down, depending on the exchange rate. The capital value of the property will also vary depending on exchange rate, thus adding another variable to your property investment decision.

Summary
Bullet Point There are multiple foreign mortgages available for property purchase in the USA;
Bullet Point commonly, large deposits are expected and in order to secure the best possible choice of mortgages, an accessible deposit of 20 percent is essential;
Bullet Point sterling mortgages are also available in the US, whereby the capital is obtained in dollars but the repayments made in sterling, thus offering at least a degree of security on a monthly basis.

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