Purchasing a Vacation Home in the United States can be an excellent investment and provide you with the opportunity to spend an amazing vacation with your loved ones in location of your choice. Most foreign buyers pay cash when purchasing vacation property because it is easier and faster. However, foreign buyers are under any obligation to pay in cash. There’s another option available and it’s called mortgage. Mortgaging a Vacation Home.
What is a Mortgage?
A mortgage is simply a loan granted by a financial lender or a bank to finance the purchase of property such as a vacation home. This loan is borrowed at an interest rate and the house acts as collateral for the amount a person borrows. With low mortgage rates in the U.S, many foreign buyers are eager to learn about this option.
As a foreign buyer, you will discover that the options available to you may be limited. Your lender or Realtor® will be able to guide you through the particulars depending on your country of origin, the amount of cash you have as a deposit, etc.
How Would You Go About it?
Of course, as a foreign purchaser of property, you might not have decided on the exact vacation home you want to buy and you are still browsing around property listings and communities in Central Florida. However, if you are interested in a mortgage, now is the time to speak with a loan officer. It is important to know answer questions like: how much can I borrow? AND how long does it take to complete the transaction? before you choose a home.
Once you arrive at a decision on the home you are going to buy, you will have to retain 25-40% percent of the property price for the down payment, depending on the lender you choose and your financial situation. Since you will be the borrower, you will be asked to furnish documentation pertaining to your identification, bank statements, income, and reference letters.
As a foreign buyer and you may not be in Florida that much, you need to understand the inquisitive nature of the lending institutions; they will inquire and get to know their borrower, which is you, so bear with them. Do not think this is a hurdle or an obstacle; rather, it is a standard procedure.
Everything is handled in a precise and thorough manner; the lender will have to assess and analyze the income and asset documentation. In case you are wondering, the review is done to search for transparency of the borrowers and understand the source of their income and how their property circulates. Depending on the country you reside, a visa might be needed as well.
It is important to work with a team of highly certified and professional people who will walk you through and guide you in the process of purchasing a vacation home of your dreams. When looking for a lender, financial professional, or an investor, it is best to do so through referrals. Ask people around and get their opinion. Remember that only a professional will be able to assist you in the process of buying vacation property on foreign soil; JC Penny Realty provides the best possible experience in buying vacation homes.
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