If you are thinking about buying a property in the US, you need to think about how you will finance the purchase. There are three basic options:

• Remortgage your UK home and purchase the American home with the cash
• Take a new mortgage from a UK lender to buy the American property – several UK lenders offer this service
• Take a US mortgage, secured on the US home

Which option is best for you depends largely on your circumstances.

Remember that the exchange rate between the pound and the US dollar can vary considerably – so if your mortgage is in dollars you will see your payments go up and down unpredictably as the exchange rate changes.

You may also find that UK mortgage lenders offer you a different choice of mortgages to US lenders – the best plan is often to sit down with a mortgage broker who specialises in overseas mortgages and let them explain your options to you.

 

Getting A Mortgage In the USA

Getting a US mortgage is reasonably simple for most people, and as in the UK, self-certification mortgages are available for self-employed people and others with variable incomes.

As a foreign buyer, you will be required to provide a deposit of 20% – 35% – meaning the most you will be able to borrow is 80% of the purchase price of your property.

Loan terms are fairly similar to the UK, with 20-30 year terms available and fixed and variable interest rate deals on offer.

Lenders will generally calculate the maximum size of your loan by setting your maximum monthly payment to be 25% – 33% of your gross monthly income (i.e. before stoppages).

 

Permanent Residents (Green Card Holders)

If you’re a permanent resident and have a Green Card, you’ll need the following documentation when you apply for a mortgage loan:

• 2 years’ W-2
• Last month’s payslip (pay stub)

 

Self-employed people will need to provide:

• Last 2 years’ tax returns
• Last 3 months’ bank statements
• IRA/401k (if applicable)

Non-Permanent Residents (US Visa Holders)

If you’re a foreigner living in the US but don’t have a green card, you’ll need to provide:

• W2 – if you have one
• Last month’s payslip
• A copy of your Visa and Passport
• Last 3 months’ bank statements
• A copy of your UK credit report
• A copy of the most recent mortgage statement for any property you might own in the UK

Holiday Home Buyers (non-resident)

Even if you are simply planning to buy a holiday home in the US but won’t be living there full-time, you should still be able to qualify for a US mortgage. You’ll need to provide:

• Last 3 months’ bank statements
• Most recent UK mortgage statement
• UK credit report
• A copy of your passport
• Employer’s reference/proof of income or audited accounts for self-employed buyers

As long as you can meet the normal affordability criteria, you should be able to get a US mortgage while living in the UK.

Self-certification mortgages are also widely available in the USA, although they may not all be available to you if you are a non-resident.

 

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