On October 18th, the Financial Times published an article entitled “Why the housing market can keep growing for many years”. The article points out that according to the latest research estimate of TransUnion, a credit information company, 17.1 million first-time buyers will flood into the housing market in the next five years, an increase of 1/3 compared with before, and these buyers will be stimulants to the housing market, which will continue to heat up the housing market and stimulate the economy.
At the same time, according to an earlier report by the Financial Times, according to data from ATTOM Data Solutions, a real estate research company, the median house price in the United States reached an all-time high of $231,000 in June this year, and the house prices in 39 of the 130 cities were higher than the historical level.
The financial crisis in 2008 dealt a heavy blow to the American real estate industry. After a period of downturn, American real estate practitioners have said in the past three years that the spring of American housing market has arrived. In the past three years, the sales of American real estate have been rising steadily. At the end of July this year, many indicators of the US housing market and consumer confidence, as well as the S&P/ Case Schiller housing price index and new home sales data, also showed that the US housing market was growing strongly, and the increased increase could not dampen the enthusiasm of buyers.
Among many buyers, the size of China buyers should not be underestimated. An article in The Washington Post entitled “China’s wealthy people flock to the American real estate market to trouble local buyers” pointed out that according to the survey of the National Association of Realtors (NAR), buyers from China have ranked first among foreign buyers in the American real estate industry for four consecutive years. The survey also shows that the total value of real estate sold by the United States to China citizens has reached $27.3 billion, exceeding the sum of the next four countries. According to the report of Rosen Consulting Group and Asia Society, by 2025, China’s real estate investment in the United States will exceed the $50 billion mark.
The active and attractive investment value of American housing market attracts more and more people to become a member of overseas investors. So, only those who have enough cash flow can get a piece of the action?
“Don’t full! Foreigners can also borrow money to buy a house in the United States! ” Recently, many China real estate agents in the United States began to promote this new policy to China buyers, which made many people excited. Although the vast majority of loan home buyers are not unable to pay back their money, they still hope to use their capital to give full play to their investment advantages in the face of the ultra-low loan interest rate in the United States. According to the latest data, the benchmark interest rate of 30-year mortgage in the United States is 3.75% (up 0.3 percentage points from 3.41% in 2013), while the benchmark interest rate of 30-year mortgage in China is 4.9% after five interest rate cuts (down 20% from 6.55% in 2013). Although the difference between the two is not as big as it was three years ago, due to the upward trend of the exchange rate of the US dollar and the depreciation of the RMB, if you can borrow money to buy a house in the United States, such a return on investment is obvious.
However, if you are not an American citizen, do not have a green card and do not work in the United States, is it easy to get a loan? What are the conditions for a successful loan?
“Although we know that there is such a policy, it is mainly local banks or smaller banks that promote it. Mr. Hua, a real estate agent in Colorado, told the interface journalist: “If there is a choice, we will not recommend foreign buyers to borrow money to buy a house.” The first is trouble, a lot of application materials; Second, the risk is high. Now the housing is tight, the house is good and the price is good. If the bank does not approve, it is a waste of time; Finally, the most important thing is that it is really luck to approve or not. As far as I know, the house can only be approved if it is invested, rented monthly and guaranteed to repay.
Mr. Hua’s words were confirmed by the mortgage Commissioner of the First Bank, who mainly serves Colorado, Arizona and California. Ms. Wang told the interface journalist: “This policy has been implemented in our bank for about two years. In two years, we have approved more than 60 foreign buyers, but there are many restrictions and requirements. According to Miss Wang, compared with domestic residents, green card holders and other home buyers who have personal credit scores in the United States, foreign home buyers need to pay more than 50% down payment when applying for a mortgage, while the former only needs to pay 30% down payment. In terms of interest rates, foreign home buyers should also be at least one percentage point higher. In addition, houses purchased by foreign buyers in the United States cannot be occupied/occupied, and can only be used for investment. In other words, you can only buy and rent. At this time, the monthly rent becomes cash flow, ensuring timely repayment to the bank every month. “With this money, the bank is able to repay. Ms. Wang said, “Of course, the income of foreign buyers in their own countries is also an important reference.”
In addition to the above-mentioned “hard indicators”, according to Ms. Wang, banks still have many unwritten rules when approving foreign buyers to apply for loans. For example, if foreign home buyers have reliable people, people with high personal credit scores or bank customers as guarantors and referees in the United States, they will gain the trust of banks more easily than applicants who don’t know anyone. Of course, it is also helpful if the foreign applicant has relevant deposits, investments or other active accounts in the bank. However, she also stressed that the real estate, real estate and other assets owned by foreign buyers in their own countries are almost useless to Bank of America, because “if one day foreign buyers can’t afford the mortgage, we have no choice but to take overseas assets and have little chance to liquidate.” “Wang Jingjing added.
Ms. Wang also told the interface journalist: “In California and new york, or other places where Chinese people are concentrated, there are relatively many financial institutions willing to provide loans to foreigners. Corresponding policies and regulations can be considered, and the standards for reducing the risk of bank lending are more perfect. In areas where there are fewer Chinese, there are far fewer institutions providing such services. In addition, whether you can get the approval is sometimes a matter of luck. Foreigners also believe in “eye contact”, which depends on the bank’s trust in the applicant.
Mr. Hua, a real estate agent, revealed that most banks that are willing to provide loan services to foreigners are commercial banks and local smaller banks. “This kind of banking procedure is relatively simple and involves few links. Foreign buyers only need to communicate with the corresponding real estate agent and the loan specialist in charge of contact, submit the corresponding materials and wait for approval. I haven’t heard of any big banks offering this service.
Richard Kumi, the banking Commissioner of Wells Fargo in Denver, Colorado, told the interface journalist: “At present, our bank does not accept loans to foreign buyers, and we will only approve loans unless we are American residents, or hold a green card, or a work visa, and have a certain credit score in the United States, reaching a certain standard.
The mortgage commissioners of Bank of JPMorgan Chase and Bank of America in this city also clearly told the interface journalist that at present, these two banks do not provide loans to foreign buyers. The mortgage commissioner of Bank of JPMorgan Chase stressed that the bank’s monitoring of domestic and foreign transfers is very strict and sensitive in view of the fine incident in 2014. Many unexplained high-value transfers will attract attention. Many international students have even frozen or cancelled their bank accounts because they bought houses or cars here, without receiving accurate information from the bank in advance, in order to avoid suspicion of money laundering. Ms. Shannon, JPMorgan Chase Mortgage Commissioner, stressed: “In our view, personal credit score is the most influential measure for American citizens, and other conditions only have added value.” “