Have a foreign buyer client who needs a mortgage? Here’s what they should know

Lenders see them as riskier than domestic purchasers, demandimg higher down payments

TRD New York /
Dec.December 04, 2017 08:00 AM

Overseas buyers, who purchased a record $153 billion worth of residential real estate across the country between April and March, face more scrutiny than domestic borrowers do when it comes to landing a mortgage.

Many lenders require foreign mortgage applicants to put up a 25 percent down-payment, as opposed to 20 percent from Americans, the Wall Street Journal reported. Foreigners in the country on visas were looked at more closely because their temporary status makes them more risky to lenders.

“Lenders treat you with greater uncertainty because there’s a chance a visa holder might say, ‘Screw it, I’m just dumping everything and moving,’” Anup Patil, a technology consultant in San Jose, Calif. who got approval earlier this year for a $760,000 mortgage, told the newspaper. “A lot of people did that during the IT meltdown.”

Roughly 44 percent of foreign buyers purchased their homes all-cash, compared to 22.4 percent of Americans.

Green card holders are treated the same as citizens when it comes to applying for a mortgage, and it’s easier for lenders to verify assets if the foreign buyer has an account with a foreign bank that has branches in the United States. [WSJ] Rich Bockmann


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