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In Florida we recognize that Foreign Nationals (International
Buyers) are a big part of the economy here, whether visiting for
a great holiday or looking to purchase that perfect vacation
villa for their escape to the land of sunshine.
Purchasing that perfect retreat in today’s market may prove to be a very good investment for the future. Rates are lower and more lenders are reducing restrictions on mortgage loans to foreign nationals.
Other options may be available for those who carry certain types of VISA’s or work papers. Each lender has different requirements for their foreign national programs. Some lenders restrict their lending to only citizens of Canada and the United Kingdom with generous options. While other lenders may open their doors to citizens of other countries, the approval requirements can be limiting.
Restrictions on lending limits vary from lender to lender and the borrower’s country of origin.
Some lenders limit the Loan-To-Value (LTV) ratio to a maximum of 50% while others have a max LTV of 75%.
Minimum loan amounts start at $150,000 with maximum loan amounts up to $10 million are available for selected programs.
Some requirements for lending include proof of funds, prior to closing on your mortgage loan. Proofs of funds are two-fold. For example, the lender needs proof that you do have money for the down payment, closing cost and reserve funds. The lender also needs to prove that the money is truly yours and that you have not received this money by illegal means or for illegal purposes.
For mortgage loans, borrowers must sign personally. If a Borrower wants to use a corporation or other business type entity, the entity must have filed US tax returns for the past two years. That income filed in the tax returns will be the qualifying income used for the mortgage loan.
Can you get a mortgage in Florida?
For many overseas buyers visiting Florida, one of the most important questions needing to be answered is whether or not you can get a mortgage in Florida.
Many lenders in the U.S have experience in lending to international buyers, however, there are very few who actually specialize in them. Outside of Orlando and to some degree Miami-Dade, the majority of mortgage brokers do not have experience with Foreign National mortgages. This can leave buyers devastated on the day they are due to sign because the loan has been turned down.
Using a mortgage broker with experience and one who can show a history of working with international buyers is absolutely paramount. Whereas a typical mortgage broker can theoretically put together a mortgage loan for a foreign buyer, it is the experienced mortgage brokers who understand the subtle changes in questioning which is required to successfully get you that mortgage.
One often overlooked question involves property usage.
Most buyers believe that buying a residential home as a vacation allows them to rent it out as well as use it themselves. This is not strictly true. If you rent out a home, the mortgage loan you are applying for must be for an investment property to avoid mortgage fraud.
If you buy a property with a mortgage loan for a second home theoretically the owner should at least use the property themselves for the first 6-12 months. If after this time frame they decide to rent the property, there should be no problem if the property is rented for a few months or more.
Even in areas like Orlando where there are Short Term Rental Zones surrounding Disney this does not guarantee owners can rent out their properties on a short-term basis, as local rules and regulations do not offer ‘blanket coverage’ for Short Term Rentals.
If you are buying a vacation home in an area such as Orlando where short term rentals are permitted, you should start by comparing an investment mortgage with a second home mortgage.
Buyers are required to state if they intend to rent the property. At that point the property changes status, a vacation home becomes an investment property which requires an investment mortgage instead of a second home mortgage.
This change does not dramatically affect your loan agreement or repayments, but it can and does occasionally raise its ugly head at closing when the bank retracts its offer of a loan because they were not informed as to the true use of the property. This leaves the buyer infuriated that the mortgage broker has not done their job and that they no longer are the new owners of their dream property even though they can obviously afford to buy it.
Who can obtain a Foreign National Mortgage?
Residents of many countries are able to obtain a Foreign National Mortgage loan in Florida. However, some lenders prefer to work with residents of certain countries based on having a history of dealing with those particular countries. People from some nations are required to make larger deposits or pay marginally higher rates in order to satisfy the lenders. Many lenders simply do not wish to deal with Foreign Nationals and this industry knowledge is what an experienced mortgage broker can offer you before you even start to look for your new home in Florida.
If you are looking to buy a home, vacation home or investment property in Florida and require a Foreign National Mortgage, contact us. Allow us to assist you in getting the right mortgage loan at the right price that will meet your personal and legal requirements.
If you want to receive more specific information and availability on our lender’s foreign national mortgage loan programs, contact us today!
As Florida mortgage brokers, our services have been designed to remove the stress and misunderstandings commonly associated with a mortgage loan.
For further information about getting the right mortgage for you
and to arrange your ‘NO-FEE ASSESSMENT’
Call us on 941-444-9240