Financing/Mortgages


Financing/Mortgages

mortgage_payment-300x199Through our partner network we can obtain for you GENUINE USA BANK FINANCING with the same interest rates and terms as those offered to resident American citizens – currently 5% and 10-30 years. The only catch is that the downpayment will be in the range of 30-50% for foreign investors with no credit history or background in the USA.

We can also offer low-doc and no-doc loans via private lenders and other institutions. These loans typically require a 30-50% down payment, interest rates can vary from 5-12%+, and terms can be 2-30 years. Despite these less-than-perfect terms, this type of financing can still be viable and beneficial for many investment strategies.

Another option is to take an equity line of credit against your property in Australia and use this money to purchase in the US. This can simplify the financing process. We can assist you with thisclick here for more information.

The final option is to pay in cash. “Cash is King” – by paying in cash, you can negotiate the lowest prices for your property, close in the shortest time, and reduce your ongoing risk.

If you are not an American Properties member, or you prefer to source your own property, always ask providers if they can finance foreign nationals. Many providers advertise this ability openly, and many others that don’t advertise it can still assist.

 

What to be wary of…

Most investment property providers, in both the US and Australia, offer some kind of financing and as mentioned earlier the terms of these loans can vary wildly. Be very wary of low duration loans that are marketed under the premise that they can be refinanced with a conventional lender at a lower rate when they expire. While lending is opening up there are no guarantees that you will be able to secure conventional financing and you may be left facing a hefty huge balloon payment or foreclosure. Consider this example of a “15 Year Loan”:

Amortization period = 15 years (The repayments are structured as if it’s a 15 year loan)

Actual loan length = 2 years

Interest rate = 10%

Purchase price of property = $100,000USD

Down payment = $50,000USD

You make all your repayments for those two years and then attempt to refinance with a conventional lender. However, for whatever reason this is not possible. You are now left with a balloon payment of around $45,000USD, if you do not make this payment the lender will happily take your property and keep your original $50,000USD down payment. If you don’t have the $45,000USD at hand the only option available is to find another lender willing to offer you another non-conventional loan at a similarly high interest rate or abandon the investment. Please consider these risks when entering into any loan agreement.


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