Purchase U.S. Land
If you have citizenship outside the U.S. but want to buy real estate in the states, the logistics can seem rather intimidating.
But it doesnt have to be a daunting task. You just need solid information and good advice from professionals who are experienced
in this area. The first step is to get an overview of how the process works, as explained below.
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Taking Advantage Of Discounts
Buying property in the U.S. can be highly lucrative for foreigners.
If you visit the country on a regular basis for business or vacations, you likely pay a premium for accommodations while you are here. But if you owned your own home, you wouldnt need to pay for expensive hotels, and while you were away, you could rent it to generate additional income.
Many foreigners are also buying in the U.S. because the housing slump has driven prices down to extremely affordable levelseven amongst high-end luxury properties.
That is especially true for those who live in countries where their local currency is strong relative to the dollar.
Capturing Historically Low Mortgage Rates
Many buyers pay cash for their homes, and if they can afford to do that, then a cash payment is the simplest transaction.
But for most people, a mortgage loan is needed in order to fund the purchase. For the first time since the global credit crisis of 2008, U.S. banks are also once again eager to lend to qualified borrowers.
Mortgage interest rates are still at historically low bargain rates, too, creating a rare opportunity.
Others who have the option of buying with cash may opt to use a loan,
because there may be other financial advantages. If you can secure a mortgage at an extremely low interest rate, for example, you may want to do that in order to free-up your available cash. Then you can invest that money elsewhere for higher returns.
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If you are a foreigner, one way to be eligible for a loan from a bank based in the U.S. is to establish a strong business relationship
with them. Thats best accomplished by putting a large amount of money on deposit.
HSBC Bank, for example, asks foreign buyers to have about $100,000 on deposit before it will approve a mortgage.
The bank may also ask for additional deposited funds representing a cash reserve large enough to cover 12 months of mortgage-related costs.
Those include mortgage payment plus tax and homeowners insurance costs. Meanwhile, down payments for foreign buyers may typically be as high as 40 percent of the loan amount, and interest rates will be slightly higher than for resident borrowers.
Property taxes vary from state to state, and federal tax laws will depend on your individual situation and country of origin.
Its highly recommended that you consult an expert tax planner in addition to a qualified attorney. Choose a lawyer who specializes in real estate, and has experience working with international buyers. Also select a realtor with extensive experience with foreign buyers, who can guide you through theins and outs of purchasing property
in the U.S.