Foreign Investors Guide to U.S. Mortgages

Investing in U.S. real estate can be a thrilling prospect for foreign nationals. If you’re considering buying a U.S. investment property, you are probably excited to earn rental income on American soil and diversify your portfolio. 

While foreign nationals are absolutely welcome to buy U.S. properties, the U.S. mortgage process for foreigners can be difficult to understand, even for those who already own property back home. That's because the US system dances to a different beat than what you're used to.

Keep reading to learn more about what the process looks like for foreign nationals who want to buy U.S. real estate. From pre-qualification to closing, we’ll tell you what to expect and which documents to prepare as you embark on your journey toward owning a piece of the American dream. 

Step 1: Pre-Qualification – Assessing What You Can Afford 

Pre-qualification is a crucial first step for anyone looking to buy investment properties. It shows you exactly how much you can afford, so you can focus on finding properties that fit your budget. During this step, a mortgage lender will assess your financial situation to estimate the loan amount you can qualify for. Once you have this information, you can start shopping for investment properties within your budget. That luxurious apartment in Midtown Manhattan might be a dream for another day, but maybe the single-family rental property in Florida can transform your investment aspirations into reality.

Documents Needed for Pre-Qualification

• Passport: Proof of identity is essential.
• Visa Status: If available, documentation of your legal status in the U.S. (work visa, green card, etc.).
• Employment Verification: Recent pay stubs or employment letters demonstrating stable income.
• Financial Statements: Bank account statements (including U.S. accounts, if applicable) to verify your assets.

Step 2: Application – Making a Good Impression

Found your dream property? Great! Now it's time to take one step closer to making it yours with a mortgage application. While a pre-qualification offers a preliminary estimate based on self-reported information, a mortgage application dives deep into your financial health. It provides the bank with a comprehensive picture of your income, job history, and savings. This information helps the bank decide if you're a good fit for a loan and ultimately, if you can comfortably afford the monthly payments for your dream property.

Documents Needed for Your Application

• Purchase Agreement: A signed contract outlining the terms of your property purchase.
• Tax Returns: Provide proof of your income for the past few years. Include your U.S. tax return if you have one. You can also use tax statements from your home country. 

Step 3: Documentation – Gathering the Necessary Paperwork

The documentation stage involves collecting various documents that verify your financial situation and identity. This might sound overwhelming, but relax! If you've followed this guide so far, you likely have most of these documents on hand already.

The following are some commonly requested items, but remember, this list may vary. It's always best to double-check with your loan officer to ensure you have everything needed for a smooth closing process.

• Proof of Income: Recent pay stubs, tax returns, or employment contracts.
• Asset Verification: Bank statements showcasing your savings and investments.
• Property Appraisal: Before you close on the residence, you’ll need to confirm that the house is valued correctly. Gather proof of a professional assessment confirming the value of the property you're purchasing.
• Homeowners Insurance: In America, you must purchase homeowners insurance before closing if you purchase with a mortgage. Obtain proof of insurance coverage for the property to be prepared for the closing process.

Step 4: Closing – Finalizing the Purchase

The closing is the final hurdle where all parties – you, the seller, and the lender – come together to finalize the mortgage and property transfer. During closing, you'll review and sign a significant amount of paperwork. Ensure you understand each document before signing. When this step is complete, you'll officially become the owner of your property. 

Documents You Will Receive at Closing

• Loan Agreement: This outlines the terms of your mortgage, including interest rate, repayment schedule, and other fees.
• Title Documents: These confirm ownership of the property.
• Closing Disclosure: The disclosure will include a detailed breakdown of all closing costs associated with the purchase.

Potential Challenges for Foreign Nationals 

While U.S. real estate offers exciting opportunities for foreign investors, navigating the mortgage process can present some hurdles. Let's explore a few key challenges you might encounter.

One significant hurdle is the reliance on credit history for mortgage approval, which can be problematic for those from overseas. U.S. banks often perceive lending to foreign nationals as riskier due to difficulties in verifying their financial background, leading to potential roadblocks in securing financing. Even with impeccable credit history from their home countries, traditional lenders may not recognize it, necessitating the translation and notarization of foreign documentation. Additionally, providing supplementary proof of financial stability, such as bank statements, tax returns, and employment verification, may be required to bolster one's mortgage application.

Moreover, post-closing confusion can add to the complexity of investing in U.S. real estate for foreign nationals if you aren’t sure what comes after closing. Property management has many intricacies, from tenant selection to maintenance coordination, and they can confuse even the most experienced real estate investor. Maximizing rental income, understanding property appreciation, and navigating local market dynamics all require knowledge and data that can be difficult to access as a non-U.S. citizen.

Waltz Does Things Differently

Investing in U.S. real estate shouldn't be stressful. Waltz simplifies the entire process, especially for foreign investors. Here’s what we do differently: 

We Don’t Require a Credit History or a Visa

The good news: with Waltz, you won’t need a visa or a credit history in the U.S. to get a mortgage. You won’t even need to translate your documents! With Waltz, the process of gathering and submitting documents is easy and much more simple. We’ll provide guidance on which forms are acceptable alternative documentation, such as international credit reports or proof of responsible financial management in your home country. With Waltz, you immediately improve your chances of securing a foreign national mortgage and achieving your U.S. property ownership goals.

We Get You Everything You Need to Purchase a Property

Waltz’s platform offers solutions to ease the burden. We’ll help you get a mortgage quickly, with up to 70% LTV* and none of the above challenges – all from the comfort of your house. We also provide you with a U.S. bank account to simplify managing investment funds and competitive currency exchange rates to reduce money transfer fees. With Waltz, financing and navigating the U.S. real estate market becomes more manageable.

We’ll Streamline Documentation

Waltz streamlines the entire mortgage application process with a fully digital platform. Forget the hassle of collecting and mailing physical copies of documents, struggling with translations, or the time-consuming back-and-forth of manual signatures. Waltz lets you upload all your documentation electronically, eliminating the risk of lost paperwork and delays. Plus, we use e-signatures, allowing you to securely sign documents from anywhere in the world.

We’ll Help You Manage Your Property After Closing

Waltz doesn't stop at closing – we continue to support you in your investment journey. Waltz helps connect you with tax professionals who specialize in foreign investor situations and property managers who will help you find qualified tenants. We also provide reports on your property's performance and can help secure the best insurance rates. When it’s time to sell, we’ll even help you cash out and watch those dollar signs roll in!

Waltz is With You Every Step of the Way

Waltz is your trusted partner throughout the entire U.S. real estate investment journey. From pre-qualification and mortgage loans to property management and eventual sale, our platform empowers you every step of the way. 

Forget the stress of deciphering confusing documents or navigating unfamiliar processes. Waltz provides everything digitally and uses secure e-signatures for a smooth and efficient experience.

Take the first step towards owning your dream investment property! Fill out a simple form and we’ll be in touch soon.