Mortgages in the United States - particularly mortgages in America

Today, most Americans have a property that was acquired using a mortgage, which indicates that mortgages in the US is one of the most popular banking products. This is mainly due to the fact that the level of mortgage interest rates in this country is considered one of the lowest. Now mortgage rates in the United States in the majority of banks is from 2.5 to 4%, and loan term of 15 or 30 years. Turning to the bank, the borrowers can count on the possibility of acquiring liked almost any property, as well as to take advantage of programs that offer mortgage refinancing.

Features of mortgage in the US.

Mortgage SSHAK main features of mortgages in this country should include a more loyal attitude of banks to real estate, which will be purchased by the mortgage. If in our country, banks are reluctant to give loans for housing under construction, the US lending institutions willing to provide credit for buying real estate under construction, and the purchase of finished housing. Another feature is that most banks offer borrowers receive a loan with a floating interest rate, the amount of which will vary periodically. Using this method allows banks to earn more, but gives borrowers a number of inconveniences, as the size of the monthly payment is always changing, and not always in the direction of decreasing. It also features a mortgage include the possibility of taking into account the borrower's income, not only in the form of wages and lease payments, but also the personal pension savings and dividends.

Is it possible to arrange a mortgage in the United States to foreign nationals?

Unfortunately, the US mortgage banks practically do not lend to foreign nationals. As a rule, to buy real estate mortgage in this country can only clients major foreign banks willing to offer this service to its customers, who already have opened their account in the place of its registration. Such borrowers must be prepared in addition to the standard documents required for mortgage, submit letters of recommendation from other credit institutions, a certificate from the credit bureaus, and in some cases a green card or registration of a foreign citizen. Requirements for documents can vary considerably among different banks. On the basis of the information received by the bank will decide on crediting the borrower or to refuse to grant a mortgage.

So, mortgages in America makes it easy to purchase a property, both at the stage of construction, and in the secondary markets, and banks charge a minimum percentage for the use of borrowed funds. However, to take advantage of mortgage foreign nationals will be quite difficult, because the mortgage products for foreigners practically absent.

America lowers rates

Mortgage rates in the US since the beginning of the year are down - contrary to the predictions of experts. Even with the continuation of the trend of strong growth in prices on the US housing is not going to happen, experts say.

According to the latest weekly report, the mortgage agency Freddie Mac, now the average rate on mortgages in the United States for 30 years is 4.23%, for 15 years - 3.33%. The downward trend in mortgage rates was clearly manifested from the beginning of the year: mortgage rates closer to the level of November 2013, when they accounted for 4.29%.

For comparison, at the beginning of this year, rates on loans for 30 years were 4.53 and 3.35% for 15 years. Active growth mortgage rates began in May - while the average mortgage rate for 30 years amounted to 3.35%, just like in the beginning of the year (3.34% in January).

Rising mortgage rates began after the Fed announced the possibility of folding programs to stimulate the mortgage market, a policy known as quantitative easing QE3.

According to analysts portal themortgagereports.com, the first reason for lower rates is that the US economy shows a slowdown. In addition, labor market indicators and consumer sector were worse than predicted by experts. For example, late last year, the unemployment rate remained at a high level - 6.7%, while the return to full employment could take two years.

In theory, the reduction of QE3 quantitative easing program should lead to an increase in mortgage interest rates. However, now there is the reverse situation: the program began to decline, and rates began to decline. The most likely reason for this situation, experts believe investor interest in US bonds. International investors buying US bonds at a faster pace than the Fed can release them to the market, analysts say portal themortgagereports.com.

At the same time, experts stress, this situation is not new.

A similar situation occurred when QE ended in 2009 when QE2 ended two years later. At the same time during the action programs mortgage rates are at record low levels - around 3%.

The possibility of continuing downward trend in interest rates will not lead to an increase in housing prices. "Prices" will not grow as they grow up in the spring of last year, "- said Jed Kolko, chief economist at Trulia Inc. (TRLA), an online service for the acquisition of real estate. The pace of price growth could slow. According to various estimates, the average growth in house prices was about 13% in 2013. In the third quarter of 2013, according to Freddie Mac, the rise in prices on an annualized basis was 8.48% in the previous quarter - 7.57%. According to the company Freddie Mac, in 2014. The housing market recovery is continuing at a steady pace. The increase in prices is projected at 5%.

The pace of sales will vary depending on the market - on the individual local markets, they can remain at a low level.

Although in general, even raising mortgage rates did not have a negative impact on the number of sales transactions. The number of homes sold in the secondary market reached the level of 2006. According to experts, it shows that the real estate market began to adjust to the increasing rates. The number of transactions at the end of the year increased in November was concluded 444 thousand. Transactions for the purchase of new housing, whereas the previous month - 354 thousand.

Mortgage

A citizen of any country may obtain financing for the purchase of real estate worth up to US $ 1 million. The additional condition for funding - the presence of any kind of buyer visa to enter the US (you can even guest). A copy of this visa is needed to process loans. Because this program is called without verification of income and savings check the buyer, eliminating any need to transfer money in advance to the American bank account. The money for the down payment can be brought to the closing of the transaction from any source.

In order to buy property in the US in credit to non-residents need to have 40-50% of the project cost, and the presence of a US bank the amount of not less than 12 monthly payments. The procedure is quite simple. For the remainder of the external financing can be obtained for a period of one to 30 years. Also, when buying on credit the bank will check carefully selected accommodation, to hold its own assessment of the value of the object. Thus, the buyer is less likely to overpay for future property. The only difference in obtaining mortgages for non-residents is that - unlike Americans - an initial payment when purchasing property is for them 10% and 40%.

The buyer submits an application to the US bank (with contract), which has a license to conduct business in the state of property location. Depending on the selected bank and the buyer of the program the interest rate can range from 8.75% to 9.87% per annum at the rate of 15 or 30 years of payments.

Documents considered by the bank from 7 to 45 days. Due to problems in the financial markets and banks issuing mortgage for foreigners buying property in the US, claims to buyers change almost every week, and of course, with more stringent requirements (increase of down payment and the availability at the time of purchase entry visa). Loans for the purchase of commercial real estate and business for foreign buyers are not yet available.

Following the approval of the bank loan title company or lawyer is preparing a full estimation of costs associated with the purchase of residential property. This document is defined by federal law and is required if the house is purchased on credit. If the buyer can not be in the United States pending a decision on lending, he could sign all of the documents at home. The package of documents will be sent by express mail and the buyer in the presence of the Consul to sign the documents on the pledge of real estate. If the property is sold without credit, notarization of signatures consul is not required. The signed documents are returned by express mail title company (a lawyer). Payment is made by check or interbank transfer. From the moment of receipt of the documents and payment title company acquires the right of ownership. In Ohio, the right of ownership may occur (this should be clarified with a lawyer) after registering "Deed" in the district court. Title company will provide a document of title to the clerk of the District Court for the registration and return the registered buyer "Deed".

The documents which are necessary for the application

1. An application for a mortgage showing revenues, expenses, assets and liabilities, jobs, housing and places. They are really interested in the last two places of habitation, and the last two places of work. Assets of them somehow not very interested in, and the list of debts and expenses they have received from the credit bureaus.

2. Tax returns for the last two years

3. The last two months of bank statements. They had several times to update.

4. Two recent reports about wages,

5. A copy of driver's license

6. Proof that the time to pay for housing the last 12 months (copies of checks or a letter from hoyaina housing)

During consideration of the application (where it took 30 days), has asked further explanation of large deposits in the accounts. Where's the money?

In addition, before the closing of the transaction, the bank made a valuation sovstvennosti (at my expense) and inspection of property boundaries (also at my expense). In addition, before the closing of the transaction it is necessary to purchase insurance on the house, and get a commitment from the title of the titular company that insures property rights.

NA costs for mortgages:

Origination Charges (a fee for the services of the bank) $ 34.50

Evaluation sotimosti $ 390

The credit report from the credit bureaus $ 10

Certificate of property that is not in the flood zone $ 11

Services cover the company $ 685

Title insurance for the owner $ 2900.00

Title insurance for the bank $ 685.00

Gosudartvennuyu registration fee $ 185.00

Transfer tax (transfer taxes) $ 2,293.50

The fee for electronic filing system $ 27.50

Study property boundaries $ 395.00

Total: $ 7616.50

Terms of mortgage:

The amount of loans $ 417.000, it is necessary to pay at least 20% of the appraised value of the property of their savings. Interest on mortgage 2.875% fixed for 7 years, and after 7 years it will change each year, depending on the 1 godichnocho LIBOR. There is an upper limit - the percentage can rise above 8.875%. Restrictions or charges for early payment is not. The body of the loan by calculating the pogashetsya uniform payments for a period of 30 years. That is, consider how much you have to pay per month (for the interest and principal amount of the loan) to 30 years to pay it. In this particular case, the minimum monthly payment will be $ 1730.11 for 7 years, and then every year will change in greater and in the smaller side, depending on the amount of debt and the interest rate.

I should add that everything happens on the phone, and all documents are poisoned by emailu. I personally do not need to go anywhere.

10 myths about mortgages in the US

Credit system is complex, and it realizes not everyone. Even in the US where the mortgage market is well developed, there are many uncertainties. It is believed that people are buying houses and apartments on average every five or seven years, and do not seek to delve into the essence of credit. To clarify the situation, analysts Zillow compiled a list of the most common misconceptions associated with a mortgage in the US.

 1. Loan interest reflects the real cost of mortgages

In fact, the real cost of the mortgage interest rate is expressed on an annualized basis (annual percentage rate, APR). It includes loan interest, fee for loan processing, mortgage insurance (if required) and other charges. However, this rate does not reflect the cost of homeowner's insurance policy. APR is usually higher than the cost of borrowing, so when choosing a mortgage program should pay attention primarily on it to get a more accurate idea of ​​the real cost of mortgages.

2. Mortgage rates are revised only once a day

Interest rates on various types of loans can vary within a day, sometimes dramatically. It is necessary to carefully choose from a variety of offers - just so you can find the most convenient option.

3. All credit institutions are obliged by law to charge the same fees for valuation of the assets and credit

In fact, no such law. Some banks cancel such charges to make rates more competitive. In contrast, there are organizations that overstate prices. Therefore, when looking for the best deal is to compare the hidden costs in different banks.

4. The borrower is obliged to take out a mortgage from that bank, which was signed a preliminary agreement

At the conclusion of a conditional preliminary agreement (pre-approval) estimated amount of the loan that the bank is ready to provide. Usually at this stage it is also checked income and credit history of the borrower's future. However, the latter does not have to continue to be a customer of the bank, which signed a preliminary agreement. It is necessary to get at least three variants of credit before finally take out a mortgage.

5. The best offer you can get in the bank, where there is a current account

Some banks do make discounts for regular customers, but it is unlikely that you will be given lower rates because you have opened an account there. Always is chosen from proposals of several banks.

6. If the loan takes the wife, when determining the rate of their credit histories play an equally decisive role

When the spouses together take a mortgage, banks seek a credit score of three major agencies: Equifax, Experian and TransUnion. Those calculate the average score of the ratings of both spouses, and use the lowest of the two, to determine the cost of borrowing. This means that the greater role played by the spouse having the worst credit history. It does not matter which of the two is primary and secondary borrower.

7. It is impossible to get a loan with a down payment of less than 5%

Many mistaken, believing that to get a loan have to invest 10, 15 or even 20% of the property value. However, FHA (Federal Housing Administration, FHA), you can get a loan, making only 3.5% as a down payment. Similar programs operate in the Department of Veterans Affairs (Department of Veterans Affairs, VA) and USDA (United States Department of Agriculture, USDA).

8. Those whose homes were seized for the debts will have to wait seven years before taking a new loan

Those who had to go through a short sale for a period, you can get a new loan in 2-4 years, depending on the size of the down payment and loan type. In case of a foreclosure waiting period longer - 3-7 years. But even those who have enough money, will not be able to establish a good credit history for just a couple of years.

9. When the negative difference between the cost of providing and credit debt refinancing prohibited

Today, millions of American owners of the amount of debt exceeds the value of the property. For them, there are two programs, one of which, Home Affordable Refinance Program (HARP), is available to those who give guarantees on loans Fannie Mae or Freddie Mac. The second program, FHA Streamline Refinance, designed to help debtors, loans which insures the Federal Housing Administration.

10. Refinance mortgages can be only once in 12 months

Under the refinancing loan repayment is understood in the same bank with the help of a loan from another bank, where the lower interest rates. If the loan guarantees allow Fannie Mae or Freddie Mac (and the majority of these loans), to refinance a mortgage at any time. It is only necessary to consider the difference between the current lending rate of the borrower and the new lending rate should allow to raise enough funds to cover the monthly cost of refinancing in two years.