Financing Your Florida
Home |
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| At the last count there were some 12,000 banks
and lending institutions in the United States, many of which
have there own "special programs" for property purchase
and these change frequently. Consequently, mortgage rates
or terms will vary for each individual case depending on circumstances
so it is not possible to give an indicative answer at this
point in time. Suffice to say that a 20% to 25% deposit is
the norm for foreign purchasers and some element of verification
of ability to meet the mortgage payments will be required
in this instance. If you are in a position to increase the
amount of cash down-payment to 30% or more, you may very well
qualify for an entirely non-verification mortgage. |
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The mortgage industry is a sophisticated
financial institution, as you would expect, and terms can
range from as little as 5 to 30 years, irrespective of the
applicant’s age. The lending system in America is primarily
based upon the borrower’s demonstrable ability to repay
the mortgage loan from income. Personal assets and net worth
are considered only insofar that these assets can or should
produce income.
Income will primarily be verified from your last two years’
P60 and copies of recent pay stubs. Alternatively, if you
are a self-employed person, you should provide copies of your
last two tax reports as filed with the Inland Revenue. In
the case of a person holding more than a 25% share in a limited
company or corporation, copies of both your P60 and any additional
directors’ drawings reported to the Inland Revenue should
be provided to determine your effective income. As a general
rule, no more than 25% to 28% of your monthly income (Gross
before Taxes) should be committed towards paying for your
Florida vacation rental home.
The mortgage Application Process will initially require a
signed contract for the purchase of a house, a completed loan
application form, plus a fee of approximately $250.00. In
order to save time and the inevitable criss-crossing of additional
paperwork you should also have available:
1. Proof of income for the last 2 years. (Form P60 and three
wage slips would be ideal)
2. A statement on your U.K. mortgage showing outstanding balance
and monthly payments.
3. Monthly Statements on any credit cards you may have.
4. Copies of any hire purchase, lease payments or other loans
you may have.
5. Current and Savings Account Bank Statements, including
Building Societies.
6. Evidence of any Stocks and Shares you may own.
7. Income Tax returns for two years. Or, if self-employed,
copies of accounts.
8. Proof that you will have the cash deposit available for
closing. This deposit can also be borrowed providing that
it is against equity, for instance a mortgage on an existing
property, however you should bear in mind that you will need
to show sufficient income to repay this loan along with your
new mortgage.
Do not be afraid to show existing loans. In America this is
taken as a good sign that you are creditworthy. Remember that
when signing a contract to purchase your home, builders will
normally accept a nominal holding deposit of around $5,000,
sometimes less, thus enabling you to hold the particular home,
lot or model you want to buy, and to send on further funds
later. |
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Easy Qualifying - None Documented
Mortgages
The qualification for a non-documented mortgage is very simple.
These requirements are:
1. A minimum 30% cash deposit
2. Your passport
3. A U.S. bank account, which you can open on arrival. It
really is that easy. |
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Should I take out a mortgage
abroad or at home?
The U.S. Internal Revenue Service allows full tax relief on
mortgage interest. If you intend to rent out your home, you
will find it useful that your liability for tax on this income
can be substantially offset by the tax allowance on your mortgage
interest. A loan taken out in the UK would probably involve
making re-payments with monies on which tax has already been
paid.
In addition you would be subject to currency fluctuations;
remember rental income is paid in U.S. dollars.
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We
would strongly urge you to seek out independent financial
advice from a qualified specialist before deciding which
purchase route is most suitable for your personal circumstances. |
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