FINANCING.
If you are thinking of buying a home in South Florida, whether as an investment, residence, vacation or permanent, it is important that you consider the possibilities you have of obtaining a mortgage loan. There are many financial institutions that offer loans, from local banks, online financial institutions, private lenders, and large financial institutions in the United States.
SOME FACTORS THAT INFLUENCE DETERMINING INITIAL, TERMS AND INTEREST RATES:
- Your nationality.
- Legal status in the United States.
- If you have a credit history in the country.
- Your income and bank accounts.
Get a mortgage.
In South Florida, about 52% of buyers usually pay cash, making the process much easier and faster, but with mortgage rates so low (they range between 4.5% – 6%) compared to those offered by their countries of origin, many choose to finance their purchase.
Requirements to obtain a mortgage.
- Depending on the nationality of the buyer, a visa is required; all foreign buyers will have to present a copy of their passport with a valid tourist visa (B-1 or B-2).
- At least 20% – 30% of the value of the home as a down payment on “Houses”.
- At least 30% – 50% of the value of the home as a down payment on “Condominiums and Townhouses”.
- Proof of income:
- Bank statements.
- Reference letters from your banking or credit institution.
- Two forms of identification.
Other common requirements.
- Social Security number.
- Tax return.
- Form W2.
- Account statement for the last 6 months.
- Proof of employment.
- Last 2 years of residency.
- Balance personal.
Loan costs.
The costs of obtaining a loan vary from institution to institution and from the use of a mortgage broker. We can use the following guidelines.
- Direct with a local bank is usually cheaper, however, you will be limited to that institution’s specific products.
- The use of a mortgage broker is very common and despite generally having a higher cost than going directly to a financial institution, you will have a much wider range of options.
- Interest varies, among other things, depending on credit history, monthly income, debts and bank accounts. In the case of clients who do not have established credit, they will have a generally higher interest.
- The initial varies depending on:
- The type of property being acquired,
- House/Single-Family Home: The initial is the lowest (10% – 20%).
- Townhouses: initial larger than houses (20% – 30%).
- Condominiums: It is the largest initial (40% – 50%).
- Nationality.
- For foreigners without established credit in the USA, a minimum of 30% down payment is generally required and increases depending on the type of property being acquired.
- The type of property being acquired,
What to do before applying for a loan?
- Get your credit report BEFORE you apply for the loan so you have time to correct errors or problems in your history.
- Be clear about how much you can put down (including closing costs).
- Shop for the best interest rate BUT take into account the other terms of the loan.
- Compare quotes.
- Request a “good faith estimate.”
What NOT to do before applying for a loan?
- Make “larger” purchases through credit.
- Do not move important money from accounts.
- Apply for any type of loan (car, boat, credit cards, etc.).
- Change your main place of residence.
- Open or close bank accounts.
How to estimate the total monthly payment when financing a property?
The most important monthly expenses to calculate the total amount to pay are:
- Mortgage
- Insurance (flood, accident, hurricanes).
- Insurance against third parties (optional).
- Condominio/expensas (maintenance fee / home owners association).
- Property tax (property taxes).
