The beneficial owner has had a connection to Texas having studied Electrical Engineering at the University of Texas. He has a modest portfolio of investment property in which he paid historically 100% with cash because of the lack of financing options.
How We Helped
Given his affinity towards Texas and the tax breaks it offers value-added manufacturers, our client chose Dallas as his U.S. headquarters. He came to us from a referral by our former client and we were able to provide the investor a financing option. This would allow him to use leverage to purchase a larger building than he originally had the cash to purchase. The building provides a positive cash-flow and is in a market with a very positive real estate outlook.
We were able to secure a non-recourse 7-year commercial real estate loan for the purchase of the property with 65% leverage.
Before you read about our 75% LTV loan program, we would like to note a few differences between U.S., Asia, and European mortgages. In the U.S., mortgages work differently than the mortgages in most of the other countries:
There are NO age restrictions
The buyer can be 85 + years old and eligible for 30 years mortgage term
For our 75% LTV loans, the asset is the determining factor, and not the borrower’s income
Life insurance is not required
NO pre-payment or redemption penalty
No tax returns or liquid reserves are required
In many cases, the seller is allowed to pay up to 3% of the purchase price for buyers closing cost
Our minimum 30% down payment foreign national mortgage program enables foreign nationals, non-U.S. residents, or employment transferees to place a minimum 30% down payment and finance up to 75% of the property value. Most of the lenders still require a 50% down payment to obtain a foreign national mortgage loan, but we can arrange financing with as little as 30% down.
Seller or developer can give the buyer up to 3% of the purchase price concession towards the closing cost and or prepays. If that is the case, most of your closing costs would be covered, and you’ll be able to invest less money upfront. The borrower must have verifiable funds for the down payment, closing cost in a verified financial institution in or outside the U.S. Any foreign language accounts would need to be translated and certified by a translation company.
Our 75% LTV mortgage for foreigners does not require Private Mortgage Insurance (PMI), so there is no extra cost. We also offer rate and term foreign national mortgage refinancing with often unlimited cash-out option (restricted by loan limits).
This foreign national refinance mortgage is available as a fixed and or adjustable-rate mortgage. Adjustable rates are 5/1, 7/1 term for 15 or 30 years fully amortized loan. In some cases, interest-only is also available.
Here are some of the loan program features:
Minimum 30% down Payment
5.75% Interest rate (right now. Does not include APR)
The term: 30 years, 20, and 15 years fixed
Loan amounts up to $5M
No pre-payment penalty
Up to 3% seller contribution towards buyers closing allowed
1- 4 unit single-family residential property eligible
Condos eligible
72 hours for underwriting
Closing on average 45 days
Here are the requirements for our foreign national loan program:
Copy of executed purchase agreement
Copy of passport
2 personal Credit References (Credit card, Mortgage, Car lease, Landlord Letter, Utility bill) OR International credit report
The client had come to us from an online search and told us that he spent 4 months working with traditional commercial lenders with the hopes of obtaining financing for their retail purchase.
How We Helped
Unfortunately, the lender always came back requesting more information, most of which our client did not have, due to not being a U.S. Entity or beneficial owners who are not U.S. Citizens.
We have worked closely with our lending partners over the past 5 years to create financial solutions to accommodate international investors and can structure and underwrite the loan with the information available.
We were able to secure a non-recourse 5-year commercial real estate loan for the purchase of the property with 60% leverage. (Also see Can a Canadian Buy a House in the USA?)
An up and coming fashion designer with dual Brazilian and U.S. passports wanted to buy a home in Miami, where she grew up. She is self-employed and therefore it doesn’t show on her U.S. tax returns her true ability to service the loan.
How We Helped
For self-employed clients, showing the ability to repay the debt can be challenging. Although the tax returns may not reflect her ability to repay the loan, her cash-flow is significant. We were able to find her a loan that did not require any tax returns and went strictly off the cash-flow (rental amount) from the property.
A mortgage term indicates the total duration of a mortgage. You will pay the lender monthly installments during this period and finally own the home after clearing off the last installment. The term of a mortgage starts from drawing the funds from the lender institution and ends on the expiry date when you need to repay the lender.
America Mortgages offer loan terms as long as 30 years (for fixed-rate mortgages) and as short as 5 years (for adjustable-rate mortgages). There are even shorter terms available, known as Bridge loans. These special loans can be as short as six months to up to one year and are excellent for procuring immediate cash-flow.
Most financial institutions offer these loans to commercial bodies like investors and constructors, but America Mortgages serves individual clients and the guarantee of some form of collateral.
If you can afford the higher monthly installments, a short-term mortgage saves plenty of money down the road. The explanation is quite simple: the longer the mortgage term, the more is the sum of the payable interest. As the interest rate is primarily front-loaded, the interest amount of a 30-year mortgage would be higher than that of a 10-year loan during the early years.
Similarly, ARM is more financially beneficial than fixed-rate loans if you can pay off the loan during the first interest cap. However, fixed-rate loans are better for people with a limited income. So, you should choose a mortgage term carefully, considering your future plans and current income sources.
A bridge loan is short-term financing used to facilitate the financing of a property for a short period. It is used to either acquire, maintain or improve a property with quick access to funds while more permanent financing is being arranged.
America Mortgages Bridge is a unique arrangement with various funds globally that gives America Mortgages the ability to source immediate asset-based capital in most countries worldwide. America Mortgages has funds and lending partners specializing in U.S.A., SE Asia, Central Asia, Europe, Central America, and the Caribbean. These unique relationships and volume give America Mortgages a lot of negotiating power on behalf of the client.
“Regardless if you’re in the U.S., Singapore, Hong Kong, HCMC, or Phnom Penh, America Mortgages Bridge is a viable short-term financing option to assets you may own globally and wish to keep but have a short term liquidity issue. In many cases, these events are unforeseen and can be resolved in a few months to a year. We understand the situation and the implications and, in most cases, take a loan from application to funding in a matter of 10 days. In most cases, we don’t like to exceed 55%LTV (loan-to-value); however, in some cases, we have been able to secure as high as 70% LTV. Anyone that knows bridge financing – that is extremely aggressive.”Robert Chadwick | America Mortgages
AMERICA MORTGAGES OFFERS BRIDGE FINANCING ON A VARIETY OF PROPERTY TYPES:
– Commercial buildings
– Hotels and casinos
– Land
– Warehouses
– Retail shopping centers
– Mixed-use residential
– Apartment buildings
– Luxury homes
– Multi-family commercial
REASONS COMPANIES OR INDIVIDUALS APPLY FOR BRIDGE FINANCING:
– Avoiding foreclosure
– Quick close on the property
– Partner Buy-Out
– Financing a project beyond standard bank limits
– Pay off debt
“When America Mortgages issues a bridge loan, a viable exit strategy is in place before the loan ever funds. Normally America Mortgages Bridge loans, regardless if they are in Vietnam, Cambodia, Hong Kong, or the U.S., the terms are relatively the same. 12-36 months interest-only payments with rates ranging from 9%-15% depending on the location, the rule of law, and the collateral. More often than not, with the proper time frame, we can refinance these assets into long-term financing through America Mortgages’ commercial or residential mortgage programs.”Robert Chadwick | America Mortgages
Often America Mortgages Bridge financing is a cheaper alternative to the standard hard money or private lending options, while just as flexible underwriting and fast with the turn around to fund. Both are non-standard loans acquired due to short-term or uncommon situations. A bridge loan term may be closed, only available for a pre-determined time, or open with no fixed payoff date. There may be a required payoff after a specific date. America Mortgages Bridge has normal terms of 12-36 months with interest-only payments.
America Mortgages provide bridge loan financing for companies, developers, and individuals on a global scale. These interim financing services have been designed to assist real estate investors with financial solutions that offer quick relief in challenging times when liquidity or cash-flow is an issue.
As one of the leading International property bridging finance companies in the market, we pride ourselves on creating long-term client-lender relationships.
Get in touch with us today to learn more about the structures and options of short-term bridge financing solutions [email protected].
Having lived in Paris for the past few years, our client was rejected by two large U.S. banks for foreign earned income regardless of whether her credit score was 812. She had excellent credit, high income, and a sizeable down payment, yet the bank couldn’t see beyond her income being earned outside of the U.S. and not having a W2.
How We Helped
Our only focus is foreign nationals and U.S. Expats. We know exactly what banks, lenders, and finance companies need in order to view her situation just as if she was living and working in the U.S. The loan was closed in 37 days with ease.
Hawaii’s property appreciation is one of the main reasons the Aloha state brings in many real estate investors, overseas and local. There is no shortage of tourists looking to rent a property, and long-term rental yields are some of the best in the U.S. For U.S. expats and Foreign Nationals looking to invest in Hawaii, buying an investment property on one of the major islands is generally a safe and very rewarding investment. Is it time to invest in your dream Hawaiian vacation home?
Last week, we compared real estate prices on the East Coast and their profitability. This week, we venture into The Aloha State and bring you property prices and average rental income between four popular investment areas in Hawaii – Oahu, Maui, Big Island, and Kauai.
Owning a piece of paradise is a dream for most people that visit Hawaii on holiday. Many real estate investors utilize their property in Hawaii as short-term vacation rentals. Although some locations on the islands may be restrictions on the minimum stay a property investor is allowed to advertise, there is surely never a lack of demand. Whether it’s February, July, or October, Hawaii sees vacationers at any season. It’s the perfect temperature, ample sunshine, and some of the best beaches in the world that play an important part in investors being able to rent out all year round. It’s the ultimate “home away from home.” Prefer a more stable long-term tenant? Not a problem. The rental prices in Hawaii are some of the highest in the nation giving fantastic yields with long-term, stable tenancies.
Oahu
According to data from the Honolulu Board of Realtors, Oahu median sales prices have constantly increased yearly since 1985. Oahu has an active and competitive real estate market with its low inventory, combined with its high demand, making it an ideal opportunity to consider investing in Oahu property. From here on, prices and demand are likely to only go one way – up!
Location:Waikele, Oahu
Avg Purchase Price
USD 1,065,640 (2000 sqft)
USD 649,500 (830 sqft)
Avg Rental Income
USD 4,580
USD 3,640
Price Per Sqft
USD 530
USD 900
Location: Waikiki, Oahu
Avg Purchase Price
USD 2,640,000 (2000 sqft)
USD 432,500 (830 sqft)
Avg Rental Income
USD 15,280
USD 4,755
Price Per Sqft
USD 1,318
USD 840
Maui
Among the 8 major islands in the Aloha State, Maui is perhaps the most famous place to visit. Due to its popularity for surfing, amazing restaurants, popular white-sand beaches, and wonderful landscapes, sightseers from around the globe just can’t get enough of Maui. According to the Hawaii Tourism Authority, millions of tourists worldwide travel to Maui every year, with a record number of 3,071,596 vacationers in 2019. These are not just the only people Maui attracts; Real estate investors find Maui’s rental yield, purchase price, and property appreciation extremely alluring.
Location:Kihei, Maui
Avg Purchase Price
USD 2,532,040 (2000 sqft)
USD 772,000 (830 sqft)
Avg Rental Income
USD 12,425
USD 6,995
Price Per Sqft
USD 1,266
USD 980
Location: Wailea, Maui
Avg Purchase Price
USD 4,540,000 (2000 sqft)
USD 847,250 (830 sqft)
Avg Rental Income
USD 22,440
USD 7,030
Price Per Sqft
USD 2,270
USD 3,450
Kauai
Based on WSJ, this Hawaiian island has become a major destination for primary and secondary homeowners during the coronavirus pandemic. Ranked 6th in the list of places to buy a seaside property, Kauai’s real estate demand is steady and sure. Because of Kauai’s laws, only one out of every odd property can be utilized as a vacation rental creating properties that can be used as a vacation rental significantly more valuable and highly sought after. Properties that can be classified as vacation rentals can be categorized as one of two categories:
1. They are situated in A VDA (Visitor Destination Area) like Princeville and Poipu
2. They have a TVR (excursion permit). The region of Kauai isn’t giving out vacation licenses, so a property either has one or it doesn’t.
Location: Kauai
Avg Purchase Price
USD 1,060,800 (2000 sqft)
USD 444,750 (830 sqft)
Avg Rental Income
USD 9,525
USD 3,410
Price Per Sqft
USD 530
USD 580
Location: Princeville, Kauai
Avg Purchase Price
USD 1,765,980 (2000 sqft)
USD 873,250 (830 sqft)
Avg Rental Income
USD 10,560
USD 4,558
Price Per Sqft
USD 880
USD 690
The Island of Hawaii (Big Island)
Hilo
Positioned as a property investment opportunity zone, the Hilo area is home to lavish wilderness, dazzling waterfalls, and vast green farmlands that continue into Kohala mountains. A fantastic scene of calderas, magma streams, and endemic Ohia trees can be viewed from the Hawaii Volcanoes National Park. Hilo’s location makes it ideal for investors to purchase an investment home and receive passive income.
Location: Hilo, The Big Island
Avg Purchase Price
USD 611,550 (2000 sqft)
USD 453,250 (830 sqft)
Avg Rental Income
USD 4,000
USD 3,650
Price Per Sqft
USD 305
USD 630
Kailua-Kona
Kailua-Kona Known for its reasonable real estate prices and amazing value appreciation, the Big Island of Hawaii is most certainly drawing investors from around the globe. Big Island is known for its elite luxury resorts attracting a lot of High-Net-Worth vacationers. Like Hilo, it is also ranked as an opportunity zone for real estate, making it a very profitable and tax-efficient investment.
Location: Kailua-Kona, The Big Island
Avg Purchase Price
USD 1,119,210 (2000 sqft)
USD 698,000 (830 sqft)
Avg Rental Income
USD 5,016
USD 3,957
Price Per Sqft
USD 560
USD 640
Whether it is to have a pure investment property or a second home to relax and get away from, Hawaii is an opportunity investment that many dream about, but few achieve. When you invest in Hawaii real estate, you get peace of mind knowing that it is one of the most stable real estate markets in the U.S. Sit back, relax, have a Mai Tai, and enjoy investing and earning passive income while the property appreciations roll in like the wave. Ready to find your place in paradise?
As a company, America Mortgages’ ONLY focus is providing market-rate mortgages financing for U.S. Expats and Foreign Nationals. 100% of our clients are clients just like you. Get in touch with us at America Mortgages to understand more about how a mortgage can get you that dream home in Hawaii. [email protected].
The debt-to-income (DTI) ratio equals your total fixed monthly debts divided by your total monthly gross income.
DTI is essential for mortgage lenders to determine the applicant’s financial capacity of paying off the borrowed money in time. Several studies suggest that borrowers with a high DTI ratio are likely to struggle more in making the monthly installments. In this case, the breakeven point is 43, which means this is the highest ratio that a lender will still approve for a mortgage. However, some lenders may consider up to 50% DTI too.
All mortgage lenders check the front-end and back-end ratios to determine the DTI. The front-end ratio covers the house-related debts, including home loans, homeowners’ insurance, property taxes, and other expenses. On the other hand, the back-end ratio mostly includes the bills and debts on your credit cards.
The ideal front-end and back-end ratios should be lower than 28% and 36%, respectively. However, a loan approval does not solely depend on this ratio. Mortgage lenders will also take your credit score, percentage of down payment, assets, and a few other things into consideration. If these figures turn out well, you can get a loan with a slightly higher DTI.
Regular household expenses will not be considered as debts. Some other big expenses that will be exempted are healthcare costs, child support, and insurance premiums.
America Mortgages Inc. is a mortgage broker focusing only on U.S. Expats and Foreign Nationals living overseas. We offer over 150 U.S. bank and lender programs direct to our international clients. America Mortgages is wholly-owned by Global Mortgage Group Pte. Ltd. an international mortgage specialist based in Singapore.
