FOMO – Time to Cash-Out!

Cash Out Refinancing

After two years of meteoric price appreciation, U.S. home prices seem to have hit their peak. U.S. mortgage rates have more than doubled since the beginning of 2022, and according to CNN, the average interest mortgage payment on a median-priced home is up 73% from one year ago. 

Recently the FED approved a 0.75-point interest rate hike, taking rates to their highest since 2008. These high-interest rates, combined with quantitative tightening, are pushing home prices down, a trend that Economists at Goldman Sachs and Wells Fargo expect to continue into 2023. 

Many non-residents who own a U.S. property are hesitant about financing their U.S. real estate when mortgage interest rates are so high. However, there is more to the picture than meets the eye. With housing prices expected to continue dropping, many savvy investors are taking advantage of cash-out refinance mortgages. 

The truth is, cash-out refinancing can be a good way to improve your financial situation – we think of it as an affordable way to borrow money if you own substantial equity in your home. The money from a cash-out refinancing can even be used to rebuild equity that you’re taking out if you decide to use it on value-adding home renovations.

With the money you take out of your property when you refinance, you can do whatever you want with it. You can stay on top of an unexpected medical or vehicle bill, finish paying back your college loans, or make home repairs.

While prices have dropped by 2.6% since the end of June, according to a CNBC article, they are still 10.7% higher than in September 2021. This is the canary in the coal mine, and foreign investors would be wise to take advantage of their equity while it’s still high

Let’s flesh this out with an example. Imagine you purchased a home in Dallas, Texas, in 2016 for $230,000. As of November 2022, that home is valued at $460,000. 

You can take advantage of that massive increase in value before it trends down by leveraging the property and extracting a substantial amount of your equity investment. The best part? You keep your U.S. property investment and its cash flow and use the extracted funds toward a new investment.

FED Chair Jerome Powell signalled that interest rates would likely reach even higher than initial targets set in September. As the value of your investment property continues to decrease, so will the potential equity you can leverage. Consider striking while the iron is hot and lock down your property value.

Don’t miss the opportunity to utilise your equity while it remains high. Let your money make you money with America Mortgages cash-out refinancing. America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. That is our sole focus and our expertise. Contact us today to speak to one of our loan officers at hello@americamortgages.com.

For more details, please visit us at www.americamortgages.com

Real Estate Investors Rejoice! AM Concierge is here!

Real Estate Investors | Portfolio Loan Interest Rates

With the continued home shortage in the U.S. of more than 3.8M properties, property developers are pulling back on new projects, and despite rising mortgage rates, U.S. property prices are holding strong. For the remainder of 2022 and going into 2023, The Washington Post stated recently, “As mortgage rates rise, prices should moderate, but low inventory will continue to be a problem.” The biggest benefit to this, bidding wars in hot cities where buyers were paying 10-20-30% over the asking price is likely going away. Now may be the time to buy while people are still figuring out the market. 

The continued feedback we get from clients is finding the perfect property represented by a vetted realtor that understands non-resident investors, with their interests in mind. This is the missing piece of the puzzle. Furthermore, looking for reputable homeowners insurance once the property is in contract is another problem. This is where America Mortgages comes in. We heard you, and our team now has solutions for both! 

If you are looking for a “full-service” solution when investing in U.S. real estate, getting a mortgage is only one step in the process. Recently, America Mortgages launched an option to match your needs with a vetted and trusted realtor. AM Concierge not only gives our clients the best mortgage options available, but they also have a reliable realtor network to choose from regardless of the U.S. state.

Upon being pre-approved for your mortgage, if requested, you will be teamed up with a Certified International Property Specialist to help you with a key step of the transaction – finding the right property! This is not a requirement for a mortgage loan. This is only an “extra tool” to assist if needed. If you already have a realtor you are working with or prefer to find a realtor on your own, please continue to do so. 

We believe that as a non-resident real estate investor if you have more resources available, you can make a more informed decision on which investment property you should buy.

AM Concierge offers;

 1. A mortgage loan tailored to your needs through a firm that are experts in non-resident, foreign national, and U.S. expat mortgage lending.

 2. A trustworthy realtor that will source a property that fits your requirements. A realtor that knows the specific market you’re interested in will show you only properties that meet your requirements, saving you time, effort and money. Often they will find properties you may not know exist. Just as it’s important to find a mortgage company that understands Foreign National and U.S. Expat lending, it is as important for your realtor to have this experience as well. Someone that works well with the mortgage professional and also understands the intricacies and nuances involved when buying from abroad. 

They will negotiate the purchase agreement and represent you through the transaction. Keep in mind, in the U.S.; the buyer does not pay for the realtor’s commission. This is paid for by the seller. It costs you nothing to have someone to represent you. 

The best part about our AM Concierge service is that there is NO cost to you!

At AM Concierge, we have a vetted and approved network of realtors in all 50 states that can assist you when buying a home as a foreign national, non-resident, or U.S. expat. These agents will work in your time zone and in your language to find a property that fits your requirements. Our agents are friendly, compassionate, and understand the process of international home buying. 

 2. Foreign Nationals and Expats Home Insurance & Other Insurance products 

If you have a mortgage in the U.S., you are required to insure the property for its replacement value, known as homeownership insurance. Living outside of the U.S., often finding a reputable insurance agent takes time and effort. It’s a small step; however, if you’re unfamiliar with the process, it can be confusing and frustrating. Again, we understand, and we are here to help. This is why America Mortgage’s home insurance mortgage solution comes from trusted insurance partners. They will assist you in obtaining a quote for homeowners insurance and other insurance needs you may have. If you’re a property owner, our trusted insurance partner will make it easy to get the coverage you need to be prepared for whatever may come your way. Again, this is a free service we provide to help your journey in U.S. real estate investing.

As a company, America Mortgages‘ only focus is providing U.S. mortgage financing for foreign nationals and U.S. Expats. Getting pre-approved for a purchase or a refinance/cash-out normally takes 72 hours from application and document submission. Once you have your pre-approval, you are ready to begin the search for your dream international property. 

If you have any questions regarding mortgages, realtors, or homeowners insurance, please speak with one of our loan officers today. 

hello@americamortgages.com

The easiest U.S. mortgage to qualify for, and America Mortgages has it!

Loan For Foreign Property | easiest U.S. mortgage to qualify

As many of you know, America Mortgages offers two main ways to qualify to purchase or refinance investment real estate in the U.S. – either using personal income or using only the properties’ projected or actual rental income. For two main reasons, most of our clients use the latter. One, their income may be extremely complex or documented insufficiently, or two, they plan to move quickly with a streamlined, minimal documentation approach.

Difficult times call for creativity and common sense.

At the beginning of the year, qualifying based on rental income, otherwise known as DSCR was easy. Rates were low, rental yields were stable, and properties cash flowed on paper very easily. Since the beginning of the year, rates have continued to increase. Overall, rates remain historically low when you look at the U.S. mortgage market over the last 20 years. Rental yields have continued to climb to record levels, however, documenting these rental yields through an appraisal, which is how we underwrite these loans, has become increasingly challenging as there is typically a lag in rental comps to support the higher rents.

This presented our team with a problem; In the current environment, in order to qualify for a “standard” DSCR loan, clients were required to put more money down to keep the underwriting numbers in line. In general a DSCR loan requires the rental income listed in the appraisal to be greater than or equal to the mortgage payment. Unfortunately, it’s going to take time for rental appraisals to correlate with the higher rental yields, to where DSCR will be a viable option again. However, we have a solution…

Rejoice Global Investors…Introducing America Mortgages’ No-Ratio Mortgage Loans!

“No-Ratio loans,” have recently been introduced as options to help clients with minimal down payments to leverage a higher LTV without the constraints of waiting for rental yield to catch up. You might ask yourself – why would someone want to go into a loan knowing the property cash flow doesn’t cover the mortgage payment?

It’s a good question! This is common sense underwriting and as mentioned previously, the rental comps mentioned in the home’s appraisal sets the cash flow target. Rental comps are hard to measure; they are dependent on when tenants in your area have renewed their leases, are the renewed leases at market rent, etc. This measurement is often not the rental amount the client is buying the property for. It is very common to review an appraisal and see rental comps being used where rents haven’t been raised in years; this is likely because it’s a stable tenant, the landlord isn’t in need of maximizing the yield and prefers to keep a stable tenant – a problem when trying to get the maximum rental amount on an appraisal and a cash flow loan to work.

Here at America Mortgages, we put a lot of emphasis on figuring out the client’s plan for the property. How do the rental comps in the area look versus what their realtor believes they can rent it for? Are they buying for long-term rentals or short-term rentals? All of these questions plan into the type of mortgage program they will utilize – and now more than ever, it’s the no–ratio loan that allows them to avoid the hassle of counting on rental comps in appraisals and still put minimal down into the mortgage as possible – they also understand the ability to refinance the loan when rates improve in the future – which they will.

Bottom line, America Mortgages’ clients are sophisticated and seasoned U.S. real estate investor. Our U.S. loan officer based in 12 different countries know and understand the market. Better than anyone else. We listen to all our clients requests, and if possible we find a solution which fits the market and  “makes sense”. No Ratio Mortgage Loans is such a solution!

Contact us today at hello@americamortgages.com to speak to our team of U.S. mortgage specialists today!

www.americamortgages.com

Go beyond ordinary banking. AM Real Estate Bridge Loan

Real Estate Bridge

What are bridge loans?

A bridge loan is a type of asset-based, short-term loan, typically taken out for a few months to a couple of years pending the arrangement of longer-term financing or an exit, such as the sale. It is used to ‘bridge’ the gap during times when financing is critical but not readily available. 

Bridge loans let homebuyers take out a mortgage against their current home to make the down payment on their new home. A bridge loan may also be a suitable choice for you if you want to purchase a new home before your current house has sold. This financing structure may also be beneficial to businesses that need to cover operating costs while waiting for long-term funding.

Introducing AM Bridge!

AM Bridge: A liquidity tool once reserved for the wealthy is now available for everyone!

Real Estate investors are often asset-rich but cash poor. On paper, their net worth may be significant, but their wealth can be tied up in real estate or other businesses. Accessing such funds might mean sacrificing a stake in their business or surrendering some influence over its future – neither of which may be appealing.

It is not always the case that a real estate investor has a few hundred thousand dollars just sitting in the bank readily available to fund a property immediately. Even if they do, they may not wish to tie all their cash upon one property. In today’s market, the property that investors want could be in high demand and needs to be acted on quickly; these could be higher-yielding investments that need immediate funding. Having access to large sums of cash quickly and easily is what HNW investors have had at their disposal for decades. America Mortgages has now made this powerful liquidity tool available to everyone.

How is it used?

Here are some popular uses of “Bridging” Loans:

– Filling the contingency sale of an old property before you can purchase the new property. You can take a Bridge Loan and use your old house as collateral for the loan. The proceeds can then be used to pay a down payment for the new house and cover the costs of the loan. In most cases, the lender will offer a bridge loan worth approximately 80% of both houses’ combined value.

– To purchase based on the asset value of the new build so the borrower can meet the final payment before delivery.

– For the initial purchase until entitlement or for refinancing after a cash purchase until entitlement. 

– To purchase greenfield land to begin commercial development. Once certain stages of development have been completed, it’s easier to obtain traditional bank financing.

– Cash-out Bridge Loan for short-term personal or business use.

The Market

The pandemic has created a boom in the bridge loan market in several ways. 

Firstly, it has created an economic environment filled with uncertainties, and as a result, more businesses need capital as soon as possible and can’t afford to wait for a traditional loan. They will thus turn to bridge loans. 

Secondly, cash is king these days. With the current value of the U.S. dollar, it may be time to look at accessing liquidity quickly and easily. Normally regardless of your current financial situation, a bridge loan gives you quick access to up to 70% of your property value with simple, easy-to-understand terms. 

Thirdly, there has been an accelerated trend of people migrating to Sunbelt cities due to greater job opportunities. This has driven up rents in these cities – the Phoenix area had the biggest rent increase in July, up 27% from a year ago. Due to the profitability of the rental trade, more developers and businesses are looking to acquire multifamily rental units. Short-term commercial bridge loans will provide them with the needed flexibility to take on such assets while they look for permanent financing options. This will help businesses get their assets to perform at maximum potential. 

The Problem

When an American Mortgage bridge loan specialist gets a request for short-term financing, they ask three things;

  1.  Where is the asset?
  2.  What is the value and the outstanding debt?
  3.  What situation are you trying to solve?

Number 3 is the most crucial and often the hardest to rationalise. Even the wealthiest people have used short-term bridge financing to access liquidity even when “conventional” options are still possible. This is mainly due to the time and effort required to obtain long-term financing. Cash flow, credit issues, or asset use may prohibit a “conventional” bank loan. When time is a factor in a transaction, it is important to see the opportunity cost of not closing quickly or obtaining a simplified equity release. 

Our Solution 

Typically, the timeline for traditional bank loan processing from origination to closing is longer than most borrowers prefer for a time-sensitive funding solution or if the project lacks sufficient stable cash flow. The short-term nature of bridge loans generally allows alternative lenders to provide an approval decision and funding with greater speed than a more traditional lender. At America Mortgages, we’ve funded loans in as little as a couple of days since the initial contact. 

To allow for such a speedy funding process, the sponsor’s expected property value and experience in executing the business plan are the determining factors in the decision-making process. For this reason, the loans are commonly non-recourse, which is another benefit to the borrower. 

Bridge loans are often the preferred funding option for uses such as:

– Highly structured transactions 

– Discounted note payoffs

– Lease-up stabilisation 

– Redevelopment of existing properties

– Repositioning of a tired or underperforming asset

– Property acquisitions with a short closing timeline (or challenges on the property or sponsor)

– Recapitalisations/Debt Restructuring or Partner Buyouts

– Other uses on a case-by-case basis depending on borrowers’ specific funding needs, where traditional funding sources like banks or insurance companies will have a hard time approving such loan requests.

– Lending to foreign nationals with a “same-as-cash” basis 

Short-Term vs. Long-Term 

Unlike short-term financing, longer-term financing is susceptible to the regulatory hurdles associated with securing long-term fixed-rate mortgages. This is why bridge loans are often provided by unregulated lenders, family offices, or in some cases, HNW investors. In addition to the regulatory scrutiny, banks or insurance companies require, the sponsor’s credit history and financial strength also take a front seat in the credit decision for long-term loans. Keep in mind America Mortgages will never work with “lend-to-own” investors and lenders. Our goal is to find you a solution that works with your situation with a long-term solution and exit from the bridge loan. 

While bridge loans are the preferred option for many specific financing needs, several downsides come with short-term financing that is meant to fund projects. When assets need work, lenders will consider these higher risks and, therefore, charge higher interest rates. 

Additionally, bridge lenders generally do not exceed 70%-85% of the property cost basis to limit their financial exposure. However, this leverage is higher than traditional lenders would advance for the same project. This is because bridge lenders rely on the sponsor to fix the issues, which made the property ineligible for long-term financing in the first place. This enables the asset to become stabilised and ready for exit through a sale or by refinancing the property through traditional channels.

As a company America Mortgages‘ only focus is to provide U.S. mortgage financing for foreign nationals and U.S. expats. 100% of our clients are working and living outside the U.S. For more information on AM Bridge, please connect with us via email at hello@americamortgages.com.

www.americamortgages.com

U.K. Alert – Top 5 Q&A Regarding U.S. Real Estate

Buy House In USA

Did you know? Non-U.S. resident investors purchased $59 billion worth of home purchases in the past year, a 9% leap from 2021, according to a report from the National Association of Realtors. 

We asked 387 of our U.K.-based readers their top 5 questions regarding purchasing an investment property in the U.S. 

Below, we answer those questions.

1. Can U.K. citizens buy property in the United States?

Yes, U.K. citizens can purchase property in the United States. It’s very straightforward. U.K. citizens can qualify for a mortgage in the U.S. with America Mortgage’s F.N. Investor + loan program. Borrowers can get pre-approved for a loan within 24 hours of application! What makes the U.S. unique from many other countries, the U.S. does not have any laws which prohibit or limit the ownership of U.S. real estate. 

2. What documents are required for British citizens to apply for a U.S. mortgage?

The loan document requirements are based on the loan program the client qualifies for. America Mortgages’ approval rate is 97%, so we can almost certainly find a solution for our clients. Below are a sample of two of our most popular loan programs for non-resident U.S. real estate investors;

America Mortgages Investor + 

  • Income letter by either the borrower’s employer or if self-employed, accountant (purchase, equity release, cash-out, or refinance).
  • Credit report from client’s home country (must be translated to English). U.K. credit report is perfect; however, if the client has credit in another country, that will also be okay. 
  • Two months’ bank statements (foreign bank accounts allowed).
  • Passport. 

America Mortgages Investor

  • Qualify ONLY on the rental income of the property (purchase, equity release, cash-out, or refinance).
  • Credit report from client’s home country (must be translated to English). U.K. credit report is perfect; however, if the client has credit in another country, that will also be okay. 
  • Two months’ bank statements. 
  • Passport.

3. Where do U.K. Citizens buy property in the U.S., and what do they use it for?

U.K. citizen property ownership in the U.S. is evenly split between suburban/resort areas (45%) and rural/urban areas (55%). Top states include:

U.K. citizens use their U.S. properties as investments, second homes, and Airbnb:

4. What is the average purchase price of houses in the U.S. purchased by U.K. citizens?

The average purchase price of houses in the U.S. purchased by U.K. citizens is $718,800, and the median purchase price is $366,600. With a total of 2.7 billion U.S. dollars annually, the United Kingdom was one of the top foreign buyers of residential real estate in the U.S. in 2021.

5. Do U.K. citizens pay the same mortgage rates as U.S. citizens?

Non-U.S. citizens may face slightly higher mortgage rates with a minimum down payment of 25%. What makes the U.S. unique from many countries is there are no age limitations on a mortgage. This means a borrower, 19 or 99, gets to take advantage of the same long 30-year tenure (fixed or adjustable). 

Overall, with America Mortgages’ Foreign National loan programs, clients do not need U.S. credit to apply for a U.S. mortgage for foreign investors. We accept international credit reports from your home country or country of residence. 

As a company, America Mortgages’ only focus is providing market rate mortgage financing for foreign nationals and U.S. Expats. 100% of our clients are living and earning their living outside of the U.S. We have loan officers in 12 different countries speaking your language, in your time zone. If you’d like to learn more about our loan programs, please email us at hello@americamortgages.com.

www.americamortgages.com

Ex-post, Ex-ante + Which States are Equity-rich?

U.S. Home Prices - America Mortgage

Ex-post

Biden cancels $10,000 in student debt – timing before the mid-term elections are interesting, but no one can deny that it is a big problem that is stifling growth in many ways. The main event was Federal Reserve chairman Powell’s speech at Jackson Hole, which was a reminder that inflation is being treated more seriously than we are expecting. Risk assets have been correcting ever since – yet bonds haven’t moved with the same intent indicating smart money had priced in the Fed’s response. While 10Y treasuries do not dictate mortgage rates, they 2 are correlated, and we expect some upward pressure on rates. 

Ex-ante

Over the next week, we will be paying attention to the Case-Schiller index as a gauge year-on-year home prices, and the big one is August ISM manufacturing index, which consensus has at 51.8 (under 50 is a contraction). If this is lower than consensus, it may portend to be something more recessionary. As we highlighted in last week’s “Ex-ante, Ex-post,” there is historically a big contraction in manufacturing output when rates rise to a certain extent.

U.S. HOME PRICES

We reiterate the underlying fundamentals of housing are very supportive, with an abundant amount of equity and well-known shortage. 

In an article written by the Fed, on 7 May 2021, “Housing Supply: A Growing Deficit”, The claim in 2018, the housing shortage was 2.5 million units, and now, more recently, in 2020, the U.S. has a housing shortage of 3.8 million units. 

That is to say, 3.8 million units are needed to not only meet the demand from the growing number of households but also to maintain a target vacancy rate of 13%. Between 2018 and 2020, the housing stock deficit increased by approximately 52% 

Elsewhere, In Bloomberg’s article published, 5 August 2022, “Almost Half of Mortgaged Homes in U.S. Now Considered Equity-Rich .”This would be the 9th straight quarterly rise, according to the article, fuelled by strong house valuations during the pandemic area. The article definition of Equity-Rich as owners having over 50% in home equity. Some of the highest equity-rich states are Florida, California, Washington, Utah, Idaho (surprising), and Vermont. 

Updated Target housing Stock
Equity Rich Graph

LOANS OF THE WEEK!

Singapore citizen purchases new development in Manhattan, New York

Location: New York CityPrice: $1,000,000
Property: CondominiumLoan Amount: $600,000
Use: InvestmentLoan-to-Value: 60%
Loan: AM Foreign National+Rate: 6.875%
Term: 30-year fixed

Singapore client attended a presentation by an international realtor on a New York condo launch. America Mortgages was attending the event and helped the client discuss the financing options available.

Philippines businessman purchases home in Florida

Location: Fort LauderdalePrice: $650,000
Property: Single Family HomeLoan Amount: $455,000
Use: InvestmentLoan-to-Value: 70%
Loan: AM Foreign National +Rate: 6.875%
Term: 30-year fixed

Referred by his local private bank, the client wanted to own a retirement home for the future (he’s only 58) but liked how rental rates have been rising in the area and also wanted more USD income.

Swedish National purchases home in Texas

Location: AustinPrice: $9,500,000
Property: Single Family HomeLoan Amount: $5,225,000
Use: InvestmentLoan-to-Value: 55%
Loan: AM HNW+ (Super Jumbo)Rate: 7.25%
Term: 5-year fixed, 30-year amortized

Swedish client saw our ad on LinkedIn and reached out to discuss the financing options for a Texas property. He was surprised at how easy it was to qualify and close for direct U.S. lending option.

Interested in releasing equity? America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. As a company our only focus is providing market rate U.S. mortgage financing for foreign nationals and U.S. expats.

Schedule a call with us at hello@americamortgages.com today! 

www.americamortgages.com

They’re Back! Overseas Buyers of US Real Estate

Overseas Buyers of US Real Estate
They’re Back! Overseas Buyers of US Real Estate

Overseas Buyers of US Real Estate

The past several years have been volatile for all areas of the U.S. economy, but especially the real estate market, which as seen price appreciation from a low-interest rate environment. Anyone who has tried to purchase a new home in the U.S. during this time has learned what it means to be a buyer in a seller’s market, but it wasn’t as bad as it could have been.

As a result of pandemic-related travel restrictions, the true scope of potential foreign buyers into U.S. real estate was not felt. That meant less competition from wealthy, overseas cash buyers. 

However, that’s beginning to change as overseas buyers of US real estate return.

According to a report by the National Association of Realtors (NAR), Non-U.S. citizens comprised $59 billion worth of home purchases in the United States from March 2021 to March 2022, a 9% increase from the previous year and the first increase in three years. 44% of these foreign buyers paid cash and the average price of homes purchased has increased by 18%, nearing $600,000.

All of this comes in the wake of a real estate environment characterized by low mortgage rates that created bidding wars, housing shortages, and price surges across the country. However, the madness may wane as interest rates rise, and an uncertain economy could sideline many potential domestic buyers.

This is good news for foreign buyers making all-cash offers because they are effectively immune from interest rate changes. As pandemic-related travel opens up, more and more foreign buyers can enter the U.S. real estate market.

Who is a foreign buyer? or overseas buyers of US real estate?

According to the NAR, a “foreign buyer” is a non-US citizen with a permanent address in another country. Moreover, 57% of these foreign buyers are non-U.S. citizens and recent immigrants who have been living stateside for less than two years or non-immigrant visa holders who have resided in the U.S. for at least six months. 

Where do most foreign buyers come from?

From March 2021 to March 2022, foreign buyers living abroad spent $24.9 billion on purchasing homes in the United States, an increase of 13.2%.

Canadians have the highest share of existing home sales at 11%, followed by Mexicans (8%), Chinese (6%), Indians (5%), Brazilians (3%), and Colombians (3%).

While Chinese buyers purchased fewer homes than Canadians, the dollar value of their purchases was substantially higher, with $5.5 billion coming from Canada vs $6.1 billion from China.

Which states are they going to?

For the 14th year running, the leading location for foreign buyers was Florida, with 45% of international purchases occurring in the Sunshine State. After Florida were California (11%), Texas (8%), Arizona (7%), New York (4%), and North Carolina (4%).

As domestic buyers are on hold due to an unpredictable economy and rising interest rates, the opportunity for foreign buyers to capture great deals will also increase. If you’re considering purchasing a house in the U.S., you may want to get in early before the rest of the world scrambles to get in on the action.

Whether you want to buy/rent a residential home or invest in U.S. real estate, it is in your best interest to connect with real estate experts committed to seeing your housing dreams come true.

At America Mortgages, we leveraged decades of experience in mortgage lending to match you with our pool of lenders. Our only focus is providing market rate U.S. mortgage financing for foreign nationals and U.S. expats. No one does it better!

Contact us today at hello@americamortgages.com to find your dream home or learn why you should invest in U.S. real estate market now.

Liquidity Issues? AM Bridge Loans to the Rescue!

Liquidity Issues

The housing market has seen intense competition, massive price surges, and dwindling inventory since 2020 – But if you’re a real estate investor, all of that may be about to change, and for the better. 

Mortgage rates are rising. In mid-June of 2022, the 30-year fixed-rate mortgage averaged 5.81%. That may seem high; however, rates now are where they were right after the financial crisis of 2008, when many people were actively trying to obtain a mortgage. 

What makes this type of market great for real estate investors? These higher rates make it more difficult for would-be home buyers to afford new homes. It’s not that people are trying to buy extravagant houses, but that a modest home with an increase of $50 a month in mortgage payments could be the difference between buying or renting. 

These higher costs are putting pressure on the housing market. It has already led to a decrease in mortgage applications to purchase and refinance for owner-occupied property, but an increase in investor mortgage applications getting in on high rental prices, demand, and lack of available rentals. What once was a seller’s market is shifting slightly, causing properties to stay on the market longer. For some, this has resulted in a liquidity issue for investors looking to sell their properties quickly to buy additional properties.

Luckily, there is a relatively simple and easy financing solution – AM bridge loans

What is a Bridge Loan?

Investors use real estate bridge loans as a short-term financing tool to bridge gaps in financing. For example, an investor might take out a bridge loan against a property they are selling in order to purchase or act on another investment property immediately. 

In this case, the homeowner may need the money before their property sells. They can now use an AM Bridge loan to extract equity today while waiting for the right price to sell.

Bridge loans can be secured quickly, often closing within a week to 10 days, and with little paperwork, because lenders are more interested in the collateral (i.e., a house) than a credit score or cash flow.

How to Use Bridge Loans to Free up Liquidity 

Bridge loans allow investors to quickly free up liquidity using their real estate assets as collateral. This is a quick asset-backed mortgage where your financials or credit are not the primary underwriting criteria; the asset is. In order to better understand how this works, let’s take a look at two examples;

1. Waiting for a property to sell at the right price:

You’re selling a property but waiting for the right price. Another investment property becomes available that is too good to pass up, but you won’t have the available funds until after you sell the existing property. No problem. Extract the equity from the property you’re selling. Take advantage of the new investment. Wait for your property to sell and pay off the bridge. It’s that easy and quick! 

2. Financial strain:

Often, unpredictable circumstances can impact our financial position. The equity in your property can be the perfect way to ride out the storm without worrying if you’ll qualify for a “conventional” mortgage loan. It is easy, quick, and straightforward to release up to 70% equity from your property based on the asset value alone. We can also structure these loans to where you do not have to make any monthly debt servicing for up to 12 months. This allows you to get the liquidity you need and then relax, reset and focus on your situation at hand. 

When do Bridge Loans Benefit Investors? 

As explained above, bridge loans are a great way to free up liquidity. A bridge loan may also be a good fit for you if you:

  • Need to free up liquidity in a fast-moving market
  • Can’t afford to take out a mortgage on a new property without selling your other property.
  • Need to secure funds to acquire or renovate real estate quickly.
  • Already purchased a property, but you can’t sell your current property quickly enough.
  • Financial strain where conventional financing won’t work or is difficult to obtain. 

The housing market is evolving rapidly. Investors would be wise to understand their options so that they are able to adapt, take advantage of opportunities, and free up liquidity when they need it. 

As a company, our only focus is providing U.S. market-rate mortgages for Foreign national and U.S. expat investors. Get in touch with us today to learn more about the structures and options of short-term bridge financing solutions hello@americamortgages.com.

www.americamortgages.com

Rising interest rates are a good thing for U.S. Real Estate Investors

Looking for passive income? Now is the time to strike!
Rising interest rates are a good thing for U.S. Real Estate Investors

Are you an overseas non-resident investor looking to purchase property in the U.S. but are thinking twice because of the increase in interest rates? Let’s break it down.

Let’s face it, interest rates are high, but if you are looking for passive income and long-term investment, we know now is the time to strike. 

When interest rates are high, it is actually more beneficial to residential rental property owners because the demand for rental homes and apartments increases as many people that once were looking will not be able to qualify for a mortgage. Individuals and families who have put off their house hunting will need a place to live. When this happens, the rental demand skyrockets, and – this is the sign you’ve been looking for –the opportunity for real estate investors looking to purchase rental property is here!

What makes American Mortgages loans unique is the rate can be fixed for 30 years regardless of the borrower’s age. Your rate today will be the same 30 years for now, but the rent you will receive will likely be significantly more! Want an even better yield? Try our 10 year fixed interest only loan program that converts to a 30 year fixed without a rate adjustment. Total tenure of 40 years!

As a foreign national or U.S. expat investor, there are a few things to consider when you want to purchase a property in the U.S. There is no denying that the interest rates have increased, but if you are looking at real estate investment, you have to consider its long-term benefits – mainly building equity and wealth, property cash flow, and rental yield.

Build Equity and Wealth

Did you know that real estate remains a wealth-building tool for the majority of moguls? An estimated 90% of millionaires were created through real estate investing. Most High-Net-Worth individuals in the U.S. or around the globe invest in real estate in some form or the other.

As you pay a property mortgage, you build equity—an asset that’s part of your net worth. As you build equity, you have the leverage to buy more properties which in turn will increase your cash flow and wealth even more. America Mortgages has no limitation on the number of mortgages one investor can have. Portfolio loans are also available.

Why Rental Yield is so Important

Rental prices are soaring in many parts of the U.S. According to Government consumer price data, the average rent that the typical Americans actually pay rose 4.8% over the past year – a higher than the average rate of increase. According to Redfin, the average monthly rent rose to $1,985 in November – an increase of 6.8% monthly and 20.5% annually. The median rent nationwide in May reached $2,000 monthly, according to Redfin.

If you are keen to invest in U.S. real estate but have not found a property yet, AM Concierge ‘Property finder’ services can help you secure your dream home. Once you have purchased the property and your tenants are in place, your rental should run on autopilot. Our America Mortgages loan officer are with you for the long run. In the event rates change, special rate promotions or new loan programs, you’ll know first.

Real Estate Cash flow

How do real estate investors get so much cash flow? You probably read a million times that “real estate is a classic wealth-building technique.” Most investments don’t provide cash flow. Take, for example, stocks -you invest and leave without accessing them until you sell them. However, when you put resources into buy and hold real estate, you bring in cash flow monthly when you have tenants paying rent. The difference between the rent collected and your expenses is your income. You can utilize it to cover your bills, save for the future, or even make a greater real estate portfolio. Passive income is the income you can survive with, regardless of whether your other investments work out or not.

Now is the time to strike while the iron is hot. If you are still on the fence about investing in U.S. real estate, speak to our mortgage specialist to discover your options. 100% of our clients are living abroad. This is all we do, and no one does it better. hello@americamortgages.com

www.americamortgages.com