Financing Options for Foreign Borrowers
If you are a Foreign National interested in investing in California real estate, and will require financing, we have a few tips to help you get prepared.
Minimum down and Maximum Loans Amount
All Property Types including Condotels
Minimum 30% down up to $1,500,000 loan amount
Minimum 35% down up to $2,000,000 loan amount
Minimum 40% down up to $5,000,000 loan amount
Typical Program Types
The most popular loan programs in the U.S. are 30-year and 15-year fixed rate mortgages. Fixed rate mortgages are now available for foreign borrowers. However, the most popular loan program for foreign borrowers is the 10-year adjustable rate mortgage (ARM).
U.S. ARM loan programs are similar to the variable rate available in most countries. However, the U.S. mortgage is amortized over 30 years and does not have a prepayment penalty.
The U.S. ARM loan programs offer an initial fixed rate of 1, 3, 5, 7, or 10 years. Once you are past the initial fixed rate period, the rate will adjust one time every year for the remaining loan term.
U.S. mortgages now require full income documentation for a minimum of 2 years. Income must be documented via Federal and Corporate/Business Tax Returns, as well as current pay stubs when applicable.
Full liquid asset documentation is required. Assets are usually documented via 2-3 months of bank, stock, mutual fund and/or retirement statements. Please note that we may not be able to use 100% of the value of retirement accounts.
All documents must be translated into English by a bank-approved company. For a complete list of documents required to process your loan, please see our document checklist
U.S. closing costs are different than in other countries. The common and standard fees required by banks/lenders in the U.S. are:
Points: A fee comprised of a percentage of loan amount (one point equates to 1% of loan amount) that has a direct relationship with the rate. The higher the points, the lower the rate and vice versa. Zero point options are now available to foreign borrowers.
Lender fees: Underwriting, loan docs, admin, processing, and funding. Some or all of these fees may be applicable and will be disclosed with our initial Lender’s Estimate.