With the advantage of the world’s leading economy and finance, along with a modern civilized lifestyle, the US is always the top destination for settling, studying and working for foreign citizens. Therefore, many investors are tending to borrow money to buy houses in the US for many different purposes: settling, investing in buying houses in the US for profit, for children to live abroad while studying, etc. However, finding and borrowing money to buy real estate in the US is not easy. Custom Invest with 6 years of experience in the field of US real estate consulting will help you learn more about the conditions, as well as the procedures and processes for borrowing money to buy in the US!

I. Conditions for borrowing money to buy a house in the US

US law allows foreign citizens to own a house forever. If foreigners want to buy a house in the US, the simplest way is to pay cash for the entire house. However, if you cannot afford it, you need to meet the following requirements to be able to easily borrow money to buy a house in the US:

• Pay 20% of the house value in advance
• Credit score of 720 points or higher
• Have lived in the US for at least 2 years
• Have a valid Social Security number (SSN)
• Have a current source of income in the US and expect that source of income to be maintained for at least 3 years
• Have at least 2 years of work experience in the US

In addition, if you own a US Green card, it will also be easier for you to borrow money to buy real estate in the US. In fact, Vietnamese people in the United States may be eligible to receive government-backed mortgage loans. This type of mortgage is subsidized by the US Government to protect borrowers from default. In particular, the Federal Housing Administration (FHA) loan for temporary residents or green card holders is one of the most prominent loans.

II. Instructions on how to borrow money to buy a house in the US

To borrow money to buy a house in the US, foreigners need to understand the following legal procedures:

Procedures for borrowing money to buy a house

Legally, there is not much difference between US citizens and foreigners who want to own a house in the US. Most Vietnamese people choose to borrow money to buy a house in the US. For green card holders, you can buy a house in the US with only a down payment of 3%.

To borrow money to buy a house in the US, you need to prepare all the usual mortgage documents as prescribed. Banks will require proof of tax returns and credit history for the last 2 years and bank statements for at least 2 months. Other requirements may vary depending on the lender.

Documents for borrowing money to buy a house in the US

Foreign citizens wishing to borrow money to buy a house in the US need to prepare the following necessary documents/files:

• Legal residence papers and visas
• Loan application (according to the form of the bank in the US)
• Documents proving tax payments and work history, transactions in the US in the last 2 years
• Bank statements for at least 2 months
• Documents/evidence proving that the borrower will continue to live and work in the US within the next 3 years
• Documents proving the borrower’s income in the US: labor contract, salary statement, salary confirmation, etc.
• If the source of income comes from business, the borrower who borrows money to buy a house in the US needs to provide a business registration certificate, financial statements, revenue reports in the last 6 months, etc.

Process for borrowing money to buy a house in the US

The process for borrowing money to buy a house in the US is carried out as follows:

• Provide loan documents to the bank/ Lending organization: foreigners need to prepare all necessary procedures and documents to be able to borrow capital from banks or lending organizations.
• Document appraisal: based on loan application information, banks or lending organizations will conduct an appraisal process to check credit history, legal residence and visa documents in the US, assess the place of residence, place of work/business, … and request an appraisal to determine the value of the house.
• Loan approval: if the application is eligible for a loan, the bank/lending organization will send the borrower a notice of loan approval, grant credit and carry out procedures related to disbursement.
• Disbursement: when the notarization of the home purchase contract is completed, the loan will be disbursed.

Home loan interest rates in the US

When borrowing money to buy real estate in the US, you need to pay attention to the interest rates of the bank/lender. Banks/lenders all apply different interest rates. If you are a green card holder, you can buy a house with a down payment of only 3% and an interest rate of 2-3%.

Foreigners who are not living in the US and are planning to borrow money to buy a house in the US for investment purposes can take advantage of foreign mortgage programs. These types of loans will have interest rates about 2-4% higher than regular mortgages.

III. Things to know when borrowing money to buy a house in the US

Borrowing money to buy a house in the US is a very important decision. Here are some basic things to keep in mind when borrowing money to buy a house in the US

Borrowers who are non-resident aliens

US homebuyers who are not green card holders may have difficulty obtaining conventional financial assistance. Foreign nationals who are not green card holders or have a valid work visa are not eligible for loans guaranteed by the US government.

Lenders have minimal resources to evaluate a borrower’s credit history, and foreign nationals will incur additional costs for credit reporting if they do not live in the US. Borrowers may require a down payment of 30-50% of the home’s value.

Which banks/institutions should foreigners choose when borrowing money to buy a home in the US?

Foreign mortgage programs from lending institutions such as 1st Capital Group or HSBC are good options if foreign nationals want to borrow money to buy a home in the US for investment purposes and do not plan to become US permanent residents. These loans usually have interest rates 2-4% higher than regular loans.

What if foreigners do not pay interest on time to the bank when borrowing money to buy a house in the US?

One thing to note is that when foreigners borrow money to buy a house in the US, they need to pay interest on time to the bank. If they do not pay interest on time, they must pay late interest according to the interest rate agreed upon by the bank and the borrower, calculated on the balance of late interest corresponding to the late payment period.

In addition to borrowing money to buy a house, what is the best way to invest in real estate today?

In addition to borrowing money to buy a house in the US, investors can also invest in real estate investment funds. Investors will not own a specific house but own shares of the project, do not have to manage the rental but will have a company responsible for selling the product, the bank will refinance, … Therefore, the return of capital to investors will be faster and more effective.

With the current high interest rates on home loans in the US, investing in a real estate investment fund is a good idea. Real estate investment funds are often particularly sensitive to interest rates because they affect profits and bond competition. Therefore, investors can rest assured to invest in funds with stable interest rates.

In addition, investing in real estate investment funds will commit to bringing long-term value to investors. While the dollar continues to increase in value, attracting foreign investors to invest in real estate in the US. Real estate investment funds investing in key projects in the US can bring huge profits that are beneficial to investors.