Step 1 & 2: Getting Prepared and Application:
Are you a citizen of another country who wants to purchase a home in the United States? Yes, there is a mortgage just for you that makes home financing easier, faster, and less restrictive.
Documentation is crucial: It is highly recommended to keep an organized file containing both originals and copies of all documents accumulated throughout the entire application process for a Foreign National. These will include:
- Full Name
- Country specific Identification Card
- Married, Unmarried, or Separated
- If your spouse or significant other will be on the loan as well, please provide their info as well for each item too.
- Home Address & length of ownership
- Copy of Passport & US Visa
- Employment letter which states the following information:
- Employer name
- Employer address
- Length of employment
- Last 2 years and YTD salary
- In addition to the information requested on the employment letter template, it must include the company address and company web address.
- If self-employed, what’s the % of ownership?
- We do not require tax returns as there is a separate letter to be filled out by your Accountant if you’re self-employed
Any other additional income streams
- Monthly payment – Please provide the last 60 days worth of pay stubs.
- Last 3 months Bank statements
- Please provide the last 90 days of your Bank statements for each account listed.
- All pages must be included even if the last couple pages are blank or contain bank verbiage.
- Extremely Important: All deposits into the account over $500 have to be sourced (excluding payroll that is direct deposited). This is extremely important and could very well delay processing of this loan should we not get ahead of this.
- What type of accounts do you have with them, and what are their estimated balances?
- Keep in mind, at the time of application, we’ll have to document 12 months of the proposed mortgage payment for the property being purchased be documented and held in a US Bank.
- Retirement Accounts – name, type of account, and balance
- Investment Accounts – name, type of account, and balance
- Credit reference letter: Please choose a Financial Institution with which you’ve had at least 2 years history to complete the Credit Reference Letter. It will only require one credit reference letter, but the underwriter does reserve the right to request more should they see fit.
- Purchase date (estimated time frame is ok)
- Original purchase price
- Existing mortgages or liens
- Name of the bank or financial institution holding the mortgage
- Balance and monthly payment
- Rental income received (if applicable)
Please be sure that the representatives are completing the letter templates exactly as they are requested so you don’t have to waste precious processing time having to fill them out again. There are no exceptions if any of the information requested does not appear on the letter.
If any Reference Letter, Employment Letter, Pay Stub, or Asset Statements are in any language other than English, it must be must be translated by a certified translator. It also must be accompanied by a Certificate of Translation confirming the company and/or credentials to conduct the translation.
Also see attached the letter templates that will have to be filled out by the employer and financial institution. The individuals preparing their letters only have to replace the bolded portions with their information applicable to the relationship. Please also note that documents submitted for a loan application are valid for 90 calendar days. (Sample Credit Letter, Employment Letter Wage Earner, Sample Self Employed Letter)
When you receive the papers to have the meeting, this is your time. You are paying good money to get this mortgage and should not ever sign anything you do not understand. I encourage my borrowers to ask questions. More problems later on come from not asking questions or making assumptions about how you think it should work.
You have to get a pre-approval for your mortgage. It is an excellent idea to be prepared for your mortgage before you start seriously looking at new homes. This will evidence of your purchasing and negotiation power in the market as well as shows how much home you can afford for. Pre-Qualification is an assessment by the lender which will be based on the certain basic information given by the borrower like income, asset info, credit reports ext. And the lender will get a quick evaluation and make a tentative decide to pre-qualify the borrower for a certain amount. This is goodwill of the lender who is willing to provide a loan for the borrower.
Why Down Payment? – Your loan type such as adjustable, fixed rate, Conventional loan is determining the down payment requirements.
Cash for Closing – Lenders are looking for a proof of your money and as well as your money for at least the last 90 days. If the money hasn’t been in the bank, be ready to prove where it came from. This can range from deposit and withdrawal slips when you have transferred money between accounts to obtaining a gift letter from a relative who gave you the money.
Choose your Loan – There are many different kinds of loans available today and the most commonly used:
- Fixed loan: This is a long-term option which requires monthly payments. It will remain the same (fixed) throughout the duration of the loan. The loan term may vary from fifteen to thirty years.
- Adjustable rate mortgage (ARM): The loan rate here will be determined by different factors like the capitalization rate, Federal Funds rate index, and readjustment intervals. The initial interest rate would be as much as 2 to 3 percent lower than a comparable fixed rate mortgage. This can make home ownership more affordable. However you have to first examine the all factors and consider the downside risks before selecting this option.
- Hybrid loan: Also known as an intermediate or convertible ARM, it offers a fixed interest rate for a specified initial period before it ‘switches’ to an ARM and adjusts with the market every six months or every year thereafter.
You should consult with your lender and decide your loan type and program which will be the best for your needs and resources.
Step 3: Processing:
This is when the mortgage professional reviews your application in order to make sure that it paints an accurate picture of your financial situation and is the internal step of submitting your application to the underwriter of the lender that will approve the mortgage.
You may get a call during this time for more information. This is not a sign that there is any trouble with your application. In fact, this may be a sign that you have a professional who wants everything just right to make the rest of the process go faster. When your mortgage banker tells you there are conditions to clear and asks for something, don’t delay. This stage is where most loans are delayed. Many times, this is due to the companies that the information must be retrieved from. This may involve things like a Verification of Employment from your place of work, a statement from your bank that the funds on your bank statement are still in the bank or proof of where those funds came from. Should any changes be made, ask for a copy of the updated application to be sent along with your Closing Disclosures that will be sent within 3 days of your application as required by law.
Underwriting is where the underwriters who are hiring by lenders examine all the data from a borrower’s property and transaction looks at the detail of the mortgage application and decides whether or not this loan makes sense. The underwriter makes the decision as to whether or not your application is approved. Loan approval committees will use underwriters’ reports during their deliberations to evaluate the property and the applicants’ creditworthiness. Your mortgage Broker will contact you during the course of the loan application process.
Step 4: The Closing:
You got it! Although this is the time that you actually sign those papers committing yourself to up to 30 years of paying the bank just to live in your house, if all the steps above have been followed and you have picked a mortgage professional that does their job, this should be the least stressful time for you.
Wiring Funds: Your down payment is either automatically deducted or wired-in the latter case, the money is electronically transferred between financial companies. Make sure that the wiring instructions as well as all important numbers must be clarified and checked for accuracy by both parties. Your cash to close amount should be wired to the Title Company prior to the Closing.
Closing Table: Review the papers you are asked to sign and bring the Closing Disclosures you received to compare and make sure all the costs that were presented up front are still the same.
Signing: Once your lender has agreed to close or fund your loan, the signing can begin. Before this happens, however, be sure to verify and finalize all the documents, and to supply any additional requirements (such as photo IDs or cashiers’ checks). The final loan documents are usually signed in the presence of a notary at a title company.
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