Mortgages

mortgage

As part of TSG Europe Ltd service we can introduce you to mortgage providers who will be able to assist you in your property purchase. For general guidance purpose only we have provided you with the following information which has been provided by a USA mortgage provider.

Obtaining finance in the USA can be a challenge due to previous over lending. Most mortgages are either on a capital repayment basis or fixed interest basis.

Capital repayment means the monthly payments consists of repaying the capital amount borrowed plus the interest, in the early years, most of your mortgage payment goes towards repaying the interest, with a small part repaying the capital.  Over the years, the amount borrowed decreases throughout the term; and by the end of the loan term the amount borrowed has been fully repaid to the lender. One advantage of the capital repayment mortgage is the borrower increases their equity in the property as the mortgage balance will be decreasing each month.

A fixed rate mortgage is a means of guaranteeing your mortgage payment over a set period of time normally from 1 year to ten years. One advantage of the fixed rate mortgage is you can budget each month as during the fixed rate period your payment will remain the same each month regardless of what the variable interest rate does, if the variable rate goes up you are in an advantageous situation.  A disadvantage is if the rate goes down you will be paying more than you should be. You are also only repaying the interest so when the fixed rate ends the capital amount will remain the same.
After the fixed rate period ends your mortgage will go onto a variable rate where your monthly payment will differ each month.

Normally non-residents can borrow 60-70% LTV and terms up to 30 years. The first step if you are going to utilise finance is to obtain approval in principal (an application form from the provider that has gone through the pre-approval process and shows the amount that the lender will potentially be prepared to lend you, this is not a guarantee an offer will be made however, just a guideline) so you know how much you can borrow.

Please note banks in the USA don’t assist with funding stage payments so if you are purchasing an off plan property you must have all the funds available until completion.

Please find below an example of the rates and criteria for a mortgage application.

  • Opening Fee: 1%
  • Minimum loan: $100,000
  • Term: up to 30 years
  • LTV: 60-70%
  • Fixed Rates: 1 year 3.5% – 3 years 4.35% – 5 years 4.75% – 7 years 5% – 10 years 5.5%
  • Criteria:
    • Employed
      • Driver License
      • 2x credit reference
      • Last 3 years Salary income
      • Tax Return
      • 3 months bank statements
    • Self Employed
      • Driver License
      • 2x credit reference
      • 3 years certified Accounts
      • Tax Return
      • 3 months bank statements
  • Early Settlement: No charge.
  • Application to closing: approx. 30 days.

If you require further information please complete the form below.

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