Foreign National Investment Mortgage

Foreign National Mortgage Loans

We are here to help!

Here are some questions a customer asks:

• What are the pros and cons of using a 1031 exchange for a Canadian Citizen buying rental properties in the United States? 
• How do I build American FICO?
• What are the different types of loans that are available to me as a non-US citizen?
• What information do I need to provide to qualify for a bank statement loan or a DSCR loan?
• What are the closing costs associated with these types of loans?
• What is the timeline for closing on a loan?

Couple issues in advising you what mortgage type is the best for your needs:::

1031 Exchange only helps you on the US IRS and applicable state returns not Canadian revenue ones.

The 1031 has strict timelines. It is not always prudent to use that tool as the timing of selling in US can be quick if you price to market but finding the replacement property with same valuation not easy at all in the deadline. If the gain is small the risks are too high.

To purchase 3-4 units now in the US you need 20% cash down plus the costs minimum, some terms are shifting to 25 down as in the US many mortgage companies are in trouble.

An ITIN number does not build a US FICO score. We can use your Canadian credit if you have a standard Canadian mortgage with paid as agreed proof for 24 months in the past to show credit paid as agreed.

We use the net after all expenses on the IRS return to show income. Typically anyone filing their first investment real estate return does not show a high number for the net. What did you show? Your Canadian returns do you show a salary job or self employed? Maybe you can qualify for a Fannie or Freddie loan but for GSE US government loans you need 25% down. I would need the numbers on both tax returns. Rate for full documentation GSE loan today is around 7.25% with 1 point no prepay, 30 year fixed if you have 36 months history paid as agreed credit.

There are other types of mortgage loans available. Here are a few:

Bank statement loans were we use ONLY ONE bank account and total up the deposits. We take out transfers from your own accounts, refunds, and an expense ratio to come up with income. Bank statement loan for non US citizen is 25% down 8% 30 year fixed with .5% points no prepay again we will use 36 months prior credit history to build a report APR 8.522

DSCR we use the market rents that the appraiser says is real plus rental agreements and a deposit check. this type loan you need 20% down and the property cannot be a fixer as you need to be able to rent at close and show the lease and deposit. Rates for these 7.5% with 2 points 30 year fixed 2 year prepay  APR 8.011

5-8 Units is another bucket no government loan 

Can do DSCR, bank statement, or full doc to qualify 25% down or more depending on city.

Rates 8% 30 year fixed 2 points 2 year prepay APR 8.714 Appraisal can be very expensive for 7 units $2000 for example

APR is points and fees added up and averaged 12 months

Full doc means all pages and not photos- clear jpg's nothing cut off or blurry

your Canadian revenue returns 2021 2022 all pages

US return 2021

current paycheck stubs

job history past five years

mortgage bills

fire insurance bills

schedule of real estate owned

bank statements past 60 days all pages

Identification

Bank statement  loans:

You send ONE account for past 24 months

Identification

mortgage bills

fire insurance bills

job history

schedule of real estate

DSCR:

same as bank statement but only 2 months statements 

plus the ID, mortgage bills, fire, job history, schedule

Rates and terms change EVERY DAY so this is NOT a rate commitment. You need a live

accepted offer to have a rate commitment. You need the funds and statements translated

into english and US dollars. All wires to title have to come from US dollars. 

There are no upfront costs. When you have a contract you give your earnest money and we

track and trace movement of all funds day by day. Then you will open escrow/title/attorney depending on the state. You pay the appraisal company directly by credit card 4 plex simple costs $600-800. You will set up US fire policy per the state and flood if in the zone. We send out about four estimates during the process. We email Monday through Friday and will push if we don't get response from you in 24 hours. At closing you must be signed by a US approved notary, which the title company controls. We do not allow digital signing for Foreign Nationals. If you are married and she is not going on the loan she has to sign to acknowledge this. A loan can be closed in twelve days if you are responsive and go to the title company to sign (arranging a notary at a US embassy adds a week or more).

This is NOT a loan Commitment

Rates change daily. Terms are always changing

 

Caroline Gerardo, 

NMLS# 324982

 

(949) 784-9699

 

 

Real Estate Investor Opportunity

I answer questions on Bigger Pockets to help people looking to purchase property as a way to invest in their future. There often are new investors who have no experience or money to purchase real estate. They want to know shortcuts to leverage with a mortgage or get 100% financing. There is no low risk magic. Many of these new small syndications of real estate go belly up within a year. The investors don't control anything about the non owner occupied rentals and have no control what the general partner does. They lose all their investment and don't learn anything about the details of buying and owning a home, then finding a great tenant. It takes good income in the past two years, great credit, liquid assets and smarts to find property that can cash flow. Then there is applying for a home loan, checking the title, getting insurance, repairing any structural flaws or improving to get the property rent ready. Then the long term haul of managing the rental. 

Here is a summary of the new SEC accredited investor exam. It's an exciting development that has the potential to open up investment opportunities to a wider range of people. I'm curious to see how the exam is designed and what level of financial sophistication it will require.

It's important to note that the exam is not a guarantee of investment success. Even if you pass the exam, you'll still need to do your own research and due diligence before investing in any security. But the exam can guide you to develop the skills and knowledge you need to make informed investment decisions.

SEC is creating an accredited investor exam. Here’s everything you need to know:

The current requirements: To be an individual accredited investor you must either: Have an income exceeding $200,000 for the past two years with the same expectation for the next year, OR have a net worth exceeding $1 million, excluding the value of your primary residence. Often these small syndicators do not check if an investor properly qualifies and the small individual loses.

A new option: As of May 2023, the House voted to pass legislation, administering the SEC to introduce an exam program that would qualify investors as accredited. The accredited investor exam requires potential investors to demonstrate a certain level of financial sophistication and understanding of investment concepts. The exam will measure an individual's ability to assess risks and make informed investment decisions.

The passage of the bill to establish an SEC accredited investor exam is a step towards strengthening investor protection and opening the door for new investors, even if they don't meet the wealth-based requirements. For commercial real estate investors, this change may add access to the sector. Hopefully it won't create loss of everything a small investor owns and cripple them. 

Sometimes failure is the best teacher. So get on that bull and start riding? What do you think about this as a new law?

Forget Me Nots

Forget ME NOTS for home loans and mortgages 

Things to remember when applying for a home loan.

Check your credit and contact my mail or email any errors to correct. 

Make sure your funds are ready to wire. 

If you have money overseas

or in crypto currency you need to know what the time line is to cash

the money into United States dollars.

Make sure  your identification is current for notary.

Don't plan a vacation during the escrow period.

Know how to open your email daily during the process.

Familiarize yourself with docusign by watching some Youtube videos.

Keep a notebook of all the houses you like.

Know the price you can afford.

Understand the principle and interest payment as well as what

property taxes and fire insurance will cost.

Homeowner Associations are also another consideration.

HOA fees always increase and though you maybe don't have

to maintain certain home structures such as roof, the HOA

has to have enough funds for disaster and enough coverage

in the Master Insurance Policy. You also will need a HO6

policy

PreApproval Mortgage

{!Userc} Home Shopping Tips: Is Now the Time to Buy? How to get ready to make an Offer? What preapproval letter works best? Hi {!My Friends},   Some potential home owners are on the fence wondering if they should wait until next year, or start shopping for a home now. The good news is, when you do decide to buy a home, you start building equity immediately. Here are some things to consider before you start shopping for a home.   Check Your Credit Score Review a copy of your credit report (before the lender does) and make sure there are no errors. Get a mortgage report it's different than a consumer report. If you do find errors in your credit report, they can be disputed. Of course, a higher credit score will secure you a better interest rate. Map out how to pay down or pay off outstanding debt, if possible.   Have Your Documentation Ready When you apply for a mortgage, you will need: Proof of Identity – Have your government-issued ID or driver’s license, social security card and birth certificate or passport. Proof of Income – This includes at least one month’s paycheck stubs, unemployment payment records, and any other documentation of regular income such as alimony or bonuses. Tax Documents – Be ready to show your last two year’s tax returns, including W-2 and/or 1099 forms. Bank Statements – The lender will want to look at your banking activity for the last 60 days to know you can manage your down payment and closing costs with sufficient cash reserves. Monthly Debt Documentation – Have your paperwork in order to document student loans, car loans, credit cards, etc. to establish your debt-to-income ratio. If you have no credit history, utility bills or records of other regular payments may be used to help you qualify for a mortgage. Additional Assets – Have documentation ready to support any additional savings, stocks, bonds, securities, etc. Get Pre-Approval By having written pre-approval from a lender, you know exactly how much home you qualify for. This helps you manage your expectations – and when you do make an offer – the Seller will consider it to be more valid. We have a wide variety of loans to choose from. Give us a call to find out what program works best for you! (949) 784 -9699   Sincerely, {!User.FirstName}   C G Caroline Gerardo Barbeau NMLS # 324982 }