The United States is a country with favorable mortgage lending, both for the Americans and for foreign citizens. Low interest rates, loyal attitude towards potential clients and the development of the country’s economy are the factors that determine the high demand for mortgages.

What mortgage programs and banks exist?

To solve the housing problem and improve the current living conditions, potential borrowers are offered a whole range of mortgage programs, each of which is aimed at a specific category of clients and has unique terms.

Currently, in America, you can get a mortgage using the following programs:

  • mortgage to support the low-income population and construction companies (The Homeownership Pool) – operates in the state of Florida and allows people with low incomes to receive a preferential loan for the purchase of housing from the established list;
  • the Home Equity Conversion program – a reverse, unattended mortgage through which retirees can get a lifetime loan secured by their existing real estate while retaining ownership;
  • Mortgage Insurance for disaster victims section – a program that can be used by anyone whose house was destroyed as a result of a natural disaster or other disaster;
  • a mortgage program for clients using energy-saving devices in their homes (Rehabilitation Mortgage Insurance) – such a loan is issued on favorable terms and at low interest rates;
  • refinancing program.

Banks that issue mortgage loans include Bank of America, JPMorgan Chase, Wells Fargo, First Republic Bank, City National Bank, The Bank of New York Mellon and others.

Interest rate in the USA

Credit institutions offer the local population mortgages at 3.5 – 7% per year. For foreigners, the rates will be higher in order to minimize the possible risks of non-repayment of debt and return of the borrower to their homeland.

On average, a foreign citizen will be able to get a mortgage loan with an interest rate of at least 5% per annum. Some banks provide loans to foreigners at 8-9% per annum.

The final interest rate will be announced to a specific client after studying the documents provided and his solvency.

Bank of America, the largest bank in the country, lends to US citizens at 3.75 – 4.4% per year (the rate will depend on the type of interest (floating or fixed) and the loan term. For foreigners, this range will increase by about 2% and amount to about 5.75 – 6.4%.

Terms for getting a mortgage

The average size of mortgage loans for foreign citizens today is about $100,000 – 150,000. Everyone takes a loan in proportion to their income. You will definitely need to pay the first installment, which is on average 40% of the housing cost. Some banks ask for 30%, others ask for at least 50%. It all depends on the borrower himself, his solvency and financial reputation.

As for the loan term, the client can choose a convenient debt repayment period – from 15 to 30 years. Most borrowers try to get a loan for the maximum period in order to reduce the amount of the monthly payment. Short terms are practically not common, as they reduce the income of banks.

A prerequisite for issuing a mortgage loan in America is the purchase of insurance against unforeseen situations and natural disasters, including fires, floods, explosions, etc. Early repayment is permitted without any penalty.

A foreigner applying for a mortgage must meet the following requirements:

  • age limit – from 25 to 75 years old;
  • a social securities card;
  • a work visa / green card or residence permit;
  • lack of bad credit history;
  • a valid bank account in the United States with an amount equal to at least 12 monthly payments on the mortgage loan.