While the strong dollar and rising home prices have deterred many foreign buyers in South Florida and across the country, more are turning to nontraditional mortgages to finance their home purchases.
Foreign buyers often pay cash for residential real estate in the U.S. – a whopping 50 percent did so in 2015, according to the National Association of Realtors. Large cash deposits have also fueled Miami’s latest condo boom.
But some lenders are offering nonconforming loans to wealthy international buyers, including Miami-based TotalBank, Milford, Connecticut-based Total Mortgage Services, and Mount Laurel, N.J.-based TD Bank to Canadian borrowers, reports the Wall Street Journal.
And while these loans require bigger down payments and offer higher interest rates than most jumbo mortgages or conventional loans, they allow buyers to buy more expensive homes. Experts told the newspaper that foreign borrowers may need to provide more documentation than they would in their home country, and to apply earlier than usual to allow for enough time.
While high prices and the strong dollar have impacted the residential market in South Florida, Latin Americans are still buying – and still interested in – Miami homes. Colombia, Venezuela, Brazil and Argentina are the top countries searching for South Florida real estate online, according to the Miami Association of Realtors. [WSJ] – Katherine Kallergis
Correction: An earlier version of this article stated incorrectly that TD Bank is providing loans to international buyers when it is only offering the program to Canadian buyers.