Foreign National Commercial Mortgage Loan Basics
As US dollar is becoming stronger and commercial real estate values are rising by the day, foreign buyers can have a real incentive for buying an investment property-whether it is commercial or residential. Persuading foreign investors to speculate in US economy has different incentives as well.
Some facts that are worth reading
As per National Association of REALTORS®, foreign buyers, until March 2014, invested in excess of $99.2 billion US residential real estate. These figures continue to soar with time. So every international buyer who can afford to invest in US properties and who look forward to living abroad should invest in the country’s real estate investment market.
When problem hits foreign real estate investors
Options for an international real estate buyer to pick from can be significantly limited as they will generally have to provide a:
- U.S Federal Tax Identification Number
- U.S Bank Account
- State Certified Corporation, LLC, LP, or any active company
- Proof of residence
And if a foreigner is incapable to furnish any of these docs, then the person will doubtlessly be ineligible to get a traditional mortgage and other similar financing options. Foreign buyers, however, can pay in cash-but as interest rates are low across the United States, it is preferred for buyers to finance their investments. And that is when a foreign national loan can be of great help to any foreign realty investor.
Understanding foreign national commercial mortgage loans
Foreign national commercial mortgage loans are available to every non-US citizen who are look forward to investing in any domestic property. However, any foreign national will not find this mortgage in traditional banks. And even the terms and conditions or requirements of this specific loan will vary from one lender to another.
Generally, foreign national mortgage lenders offer this loan type at down payments that start anywhere around 30 percent of the buying price. However, the down payment can even go as high as 40 percent-that depends on the size of the loan that any foreigner may apply for.
Apart from large down payments, this loan is similar to a traditional loan. The process of securing this loan is just like the one followed to get a domestic loan. For building a borrower profile, lenders will need:
- Their passports
- A Tax Identification Number given by the Internal Revenue Service
- Asset proof that is verified by any global financial institution
- A Letter of Professional Reference From An Accountant and or Banker
Foreign borrowers will generally have to pay a higher interest rate than the ones given by US residents. But borrowers may get a commercial mortgage with an annual interest rate as low as five percent because of larger down payments and historically low interest rates.