One of the most attractive places to work and live in the world is the United States of America. Is it possible here to settle here, get a loan to buy a home, a car and open your own business?
Own home or apartment is one of the basic goals of any family. However, most people can not afford to buy housing without the involvement of banks or other financial organizations.
The United States of America is one of the most profitable countries in the world to obtain a mortgage loan. The local population is absolutely normal about “life in debt”, since interest rates on any type of lending are minimal.
What to do if you want to buy a home in the USA
When making a decision to buy a home, but not having the ability to pay all its value immediately, you must contact the bank. A trust loan for the purchase of real estate is issued on the collateral of this property. The status of the house in this case will be publicly disclosed in specialized publications and entered in the register of rights to real estate. In essence, such a house will belong to a bank or a financial institution that has allocated a loan until the payment of the full amount and interest.
The average cost of a 2-3 bedroom house in the US varies from $ 70,000 to $ 400,000 depending on the state and the material from which it is built (stone and brick 20-30% more expensive than wood and frameworks). For an ordinary citizen, this amount seems quite real, but most people do not want to part with most of their savings right away or start toughly save on life.
Therefore, they prefer mortgages for 10, 15 and 30 years. This payment mode allows you not to worry about monthly payments, since they make up 10 to 20% of the income of the family. Of course, in this case, the cost of the home for the borrower increases and in the end for the original $ 100,000 will have to be doubled over 30 years.
However, there are a few nuances that allow US citizens to pay lower amounts:
– high competition of honey by banks and other financial institutions providing loans, gives a chance to obtain rather favorable conditions for lending, bonuses for paying interest on time, etc.;
– loyalty of banks to early repayment of loans;
– the possibility of obtaining a preferential mortgage for veterans, invalids, victims of various natural disasters, representatives of certain groups of professions, etc.;
– banks willingly give money to buy both housing in the secondary market and in the primary. There is no risk that the house under construction will not be completed or put into operation in due time, as the state takes an active part in the insurance of such projects;
– possibility to take a loan in another bank on more favorable conditions for early repayment of mortgage (refinancing).
Types of mortgage lending in the US
There are two main types of mortgage – with a fixed and floating rate. Fixed rate is always higher than floating, but it is less risky for long-term lending, since you will always be paying the same amount.
Floating rate is usually 30-40% lower, but it is tightly tied to the economic situation in the country, stock markets and exchange rates, so it can be beneficial only for short-term loans or early repayment.
Mortgage for foreigners in the US
Citizens of foreign countries, US banks also provide loans, however, under more stringent conditions. So, if a citizen of the United States makes a loan, the initial payment for it is minimal (about 10% of the total amount) or is optional at all. The alien will have to put up immediately to 30-40% of the total amount. Agree, this is essential.
If the local average interest rate ranges from 2.85 to 4.5%, then foreigners receive a loan of 7-10%. Also, the procedure itself will take much longer and more difficult. For example, you will need a letter of recommendation from your bank at home and account information opened no later than two years ago. There must be an amount of 12 of your monthly income.
Also, an account with the US bank with the amount of the initial payment, the sum of insurance and the reserve, which is equal to at least 12 mortgage monthly payments and the full cost of services for the registration of a loan, is required. On average, with the availability of an open working or other US visa, a foreigner loan is at least 45 days.
It is extremely reluctant local banks to lend to the citizens of the CIS, because it involves a lot of precedents of non-returns, late repayment and fraud. Also, not all our compatriots have a stable income, sufficient to fulfill all the conditions for mortgage lending to foreigners.
These are just some of the most important aspects of mortgage lending in the United States, but they will help you shape your impression and understand whether lending to citizens of other states (such as the CIS countries) in America is beneficial.
Picture Credit: mastersenaiper