# Getting a US mortgage



## Lemontree1 (Dec 4, 2010)

Hi

I'm brand new to this forum and joined because we are moving to the US from the UK after Christmas. I'm on a secondment from my company for an indefinite period, living and working in NJ.

My question: I'd like to buy a house but, with zero US credit history, what advice do you all have? For the first few months we're renting but I'd love to own. 

Many thanks

Andy


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## nat21 (Oct 10, 2010)

I am no expert on this but it would be near impossible for you to get a mortgage approved from the bank unless you have a substantial amount of funds (talking about being a multimillionaire here). Due to the state that the economy is in, to qualify for a mortgage at a decent rate, your credit score needs to be 700 and above. You will need to build a good to excellent credit history before being able to qualify for a mortgage.


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## Lemontree1 (Dec 4, 2010)

Thanks for that quick response! First, I'm not a multimillionaire so let's get to work!

I do have a decent job and salary which I can show to the bank. But my guess is that doesn't count for a lot. So how do I build a 700 score? I've had a look at wikipedia and we appear to be talking about a FICO credit score which ranges from 300-850 with 60% of scores being 650-799. My real estate agent told me that a good start would be applying for a store care when I arrive and paying that down over a few months, then applying for another one and so on. 

Any other tips?

Thanks


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## nat21 (Oct 10, 2010)

I would say stay away from store credit cards as they have some of the highest interest rates. Maybe you can speak to the representative at the bank when you open your account and open a bank credit card. Since you will be new to this country, they might give you a small line of credit. Start building your credit with this card and then if you feel it necessary to get another card, do so but again stay away from the store cards. 

Your FICO score determines that interest you willl have to pay on your credit cards, car loans and mortgage. Once you have a credit card, then you should always pay off the minimum balance on time to show that you are responsible. Reduce your debt to credit limit ratio on your credit card. You should always also build a credit history and not try to open too many new credit cards/ loans at once. Also, whenever your credit score is checked/run you lose a few points and your credit score is checked every time you apply for a credit card/ loans or insurance. You don't want to get too many credit cards, the length of your credit history also plays a role in your score. Just be careful you don't open too many credit cards and ALWAYS read the fine print.


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## theresoon (Apr 11, 2008)

Lemontree1 said:


> Thanks for that quick response! First, I'm not a multimillionaire so let's get to work!
> 
> I do have a decent job and salary which I can show to the bank. But my guess is that doesn't count for a lot. So how do I build a 700 score? I've had a look at wikipedia and we appear to be talking about a FICO credit score which ranges from 300-850 with 60% of scores being 650-799. My real estate agent told me that a good start would be applying for a store care when I arrive and paying that down over a few months, then applying for another one and so on.
> 
> ...


What is store care? If you mean store credit card, I would rather go with an American Express instead. Pay it off every month. There is no way for your score to get to 700 in 6 months anyway.I don't think you'll have a problem getting that, the Amex I mean. 
Your Estate Agent might not have experience dealing with expat customers so don't rely on htem too much. There are many different kinds of mortgages from different sources. If you are working in NJ and have pay stubs and info from the employer and current bank that shows the money going into the account that is also good. Things have changed recently with the crisis but I am sure there are still places where you can get a mortgage. The rate might be higher though.


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## Bevdeforges (Nov 16, 2007)

Back before the current financial crisis, I had asked the people at my US bank about mortgages for foreigners (related to problems a friend had been having).

Basically, some banks will limit the term of your mortgage to the period for which your visa is valid. Basically, this limits mortgages to green card holders. Other banks will work with you, but may require larger down payments or other "guarantees" of payment. Generally, the smaller banks that aren't part of the mortgage re-sale train have somewhat greater flexibility on mortgage terms, however that may be history now with the mortgage meltdown.

Smaller banks may also expect you to have been a customer for at least two years before they'll work with you on a mortgage. 
Cheers,
Bev


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## Lemontree1 (Dec 4, 2010)

Thanks for all your advice, much appreciated. 

I will be banking with HSBC so I'll certainly be trying to get a credit card through them. I'm also currently an Amex card holder in the UK so I'll talk to them, although I suspect it's more to do with jurisdiction than existing relationship.

Yes sorry I meant store card not care! I guess I was thinking here that we'll need to buy various things on arrival so why not see if the store would offer a card. I agree the APR's are usually terrible unless you pay the full balance but I was willing to accept that for a short period to build score. I take the point about not opening too many, it's not what I want either, so I'll start with HSBC and Amex and go from there.

I'll also call round the local banks to see what they're prepared to do.

What about car leasing/loans? I assume that's the same issue?


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## theresoon (Apr 11, 2008)

Since you already have Amex call them up before you leave and talk to them about hte International Amex. I am not sure how that affects your credit score but the way it basically works is that you can use it in the US and then paying it in GBP without incuring the fees for the exchange every time.
Apart from the retail banks you could get a mortgage through a mortgage bank. I think your best bet would be to talk with a mortgage consultant. What they do is they look at your financials and circumstances and match it with a lender who is willing to take you on as customer. Some accountants/CPAs offer this as a service to their customers.


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## nat21 (Oct 10, 2010)

Lemontree1 said:


> What about car leasing/loans? I assume that's the same issue?


When you buy a car, you get a loan to buy the car and you pay a monthly fee to the lender until your loan is paid off (just like a mortgage I guess). However, the interest on the loan will depend on your credit score. 

Car leasing is when you are paying for the right to use a car for a time period, usually for three years. After that time, you simply return the car, trading it in for a different model or year. I would never recommend this as I see it as throwing money away as the car is not yours.


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## Fatbrit (May 8, 2008)

nat21 said:


> I would say stay away from store credit cards as they have some of the highest interest rates. Maybe you can speak to the representative at the bank when you open your account and open a bank credit card. Since you will be new to this country, they might give you a small line of credit. Start building your credit with this card and then if you feel it necessary to get another card, do so but again stay away from the store cards.
> 
> Your FICO score determines that interest you willl have to pay on your credit cards, car loans and mortgage. Once you have a credit card, then you should always pay off the minimum balance on time to show that you are responsible. Reduce your debt to credit limit ratio on your credit card. You should always also build a credit history and not try to open too many new credit cards/ loans at once. Also, whenever your credit score is checked/run you lose a few points and your credit score is checked every time you apply for a credit card/ loans or insurance. You don't want to get too many credit cards, the length of your credit history also plays a role in your score. Just be careful you don't open too many credit cards and ALWAYS read the fine print.


I would echo most of this. Places where I would add or change it....

If the bank won't give you a credit card, ask for a secured credit card. Here you put the money down to start with to guarantee repayment. $500 is usually the minimum. The big three all offer them.

"then you should always pay off the minimum balance on time to show that you are responsible" I don't quite agree with. You should certainly pay off the minimum every month. But you can pay off the full amount, not pay interest, and still receive the same benefit to your credit score. The FICO algorithm does not care whether you pay interest or not.


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## twostep (Apr 3, 2008)

nat21 said:


> When you buy a car, you get a loan to buy the car and you pay a monthly fee to the lender until your loan is paid off (just like a mortgage I guess). However, the interest on the loan will depend on your credit score.
> 
> Car leasing is when you are paying for the right to use a car for a time period, usually for three years. After that time, you simply return the car, trading it in for a different model or year. I would never recommend this as I see it as throwing money away as the car is not yours.


You pay a fee in form of loan application fee. Then you pay interest and principal. The loan is secured by the vehicle and generally a matrix grid determins the interest rate. Vehicle type, age, value, credit history, FICO score ... a number of factors get worked in.

Leasing works with a similar matrix but requires a down payment, monthly payments and a final payment. This depends on mileage and shape/value of car at that time. Does it make sense? It depends on what you use a car for, how often you upgrade vehicles and your mileage. The mileage tends to be a problem:>)


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## Lemontree1 (Dec 4, 2010)

Quick update on this. I opened a UK HSBC bank account through a corporate contact at work (I don't work for HSBC but we use them in my company). They helped me get started with the US application by introducing me, which I completed when there last week. I now have an HSBC account and credit card with decent limit. So it wasn't so hard and, provided I now use the card and remember to pay on time, then I'll be building before I even arrive. HSBC also offer car leasing/loans and, whilst they may be more expensive, it's relatively simple already having a relationship. There worlds local bank eh? Yep I'd say so on my first experiences!


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## nat21 (Oct 10, 2010)

Lemontree1 said:


> Quick update on this. I opened a UK HSBC bank account through a corporate contact at work (I don't work for HSBC but we use them in my company). They helped me get started with the US application by introducing me, which I completed when there last week. I now have an HSBC account and credit card with decent limit. So it wasn't so hard and, provided I now use the card and remember to pay on time, then I'll be building before I even arrive. HSBC also offer car leasing/loans and, whilst they may be more expensive, it's relatively simple already having a relationship. There worlds local bank eh? Yep I'd say so on my first experiences!


I'm happy for you Lemontree! Good luck in your move to the US and finding your place...


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## goodman (Oct 3, 2009)

Lemontree1 said:


> Hi
> 
> I'm brand new to this forum and joined because we are moving to the US from the UK after Christmas. I'm on a secondment from my company for an indefinite period, living and working in NJ.
> 
> ...


 We have been trying to buy our own place for nearly 2 years and this month it actually looks like it might happen. Third time lucky!! As soon as you get here try to start building your credit rating. We found the easiest way was to get a secured credit card with a bank (you put down say $300 and then you get to spend on the card up to this amount). After about 6-12 months you will start to get offers through the post for other credit cards so take out about 2 or 3 and use them regularly. Make sure you pay all bills & rent on time. The criteria for getting a mortgage in the US has become very strict and it may be at least 12 months before you are considered to get a mortgage but work at building your credit score and you will be in a good position. Good luck.


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## xarp (Feb 18, 2009)

Fatbrit said:


> I would echo most of this. Places where I would add or change it....
> 
> If the bank won't give you a credit card, ask for a secured credit card. Here you put the money down to start with to guarantee repayment. $500 is usually the minimum. The big three all offer them.
> 
> "then you should always pay off the minimum balance on time to show that you are responsible" I don't quite agree with. You should certainly pay off the minimum every month. But you can pay off the full amount, not pay interest, and still receive the same benefit to your credit score. The FICO algorithm does not care whether you pay interest or not.


I agree with Fabrit - what I have researched it is better to pay the full amount every month, not keeping the debt to go in the next month.

Also it doesn't matter how big secure credit limit you take - I mean you can play the same game with $300 secure credit card or $1000, and it shouldn't have any effect on building the credit score.

The important thing is to use the credit card every month, but not overuse it. What I have researched, people were saying that it's the best to use only 10% - 30% of your credit limit. If you use it more or even the whole limit - than the bank see that you are really dependent on the credit card and it's not the best for your credit score.

How I do it, I use the credit card for quite regular expenses, like gas. I know I would have to spend the money on it anyway, and also you can decide exactly how much money you will use on the card this way.


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## birchie (Dec 13, 2010)

I;m moving to NJ in Feb/Mar 2011. I've looked into getting credit score sorted and its not easy. 
I have been lucky enough to get an HSBC Premier Bank Account which give both debit and credit card with pretty larger credit amount. I have also spoken to Land Rover about buying a car from them on a lease which CAN be done. They just need my contract of employment, I-94 & SSN, once i arrive. I will be taking my credit record over from the UK and showing it to the banks.
From what i understand i basically have to build lines of credit with places to establish a credit score before i'll have a chance of getting a mortgage. 
The only other place that might provide me with a mortgage is a multi-national bank but deposits are 30-50% and rates are similar to commercial rates in the UK...so not that great .

hope this helps.

thanks


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## vegasboy (Apr 28, 2010)

Just before the real estate crash, I applied for a mortgage which was approved, but the valuation didn't meet the criteria of investors vs residents in the complex. We the signed on another deal, and the criteria then changed. Since then, as you know, it is almost impossible for foreigners to get mortgages.

I live in South Africa but own property in Florida which I paid cash. I have a check account with one of the large banks in th US and pay my yearly taxes and monthly Florida Power & Light bill. 

Question: Will that contribute to a credit score?


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## Lemontree1 (Dec 4, 2010)

Just checking back in to confirm we did indeed get a mortgage and will close on a house purchase next week. How did we get finance? Well I ended up with Chase who actually took me on as a private client and underwrote the mortgage themselves. So I didn't need a credit score and put only 10% down. 

But I should also say that I do now have a 700 score after only 6-7 months of being here and actually could get an FHA mortgage with most banks (10% down). All I did was open an HSBC credit card and paid the balance off in full each month. I then rang Amex (who I've used for years in the UK) and they gave me a card without needing a credit check on the back of the UK relationship. 

So my message is clear to anyone coming to the US and looking to build credit - join HSBC before you leave home, open an account when you arrive, start using it and paying off in full, call Amex if you have used them before. Then just sit patiently for 6 months. I may be unique but maybe not...


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## RealMonkey (Jun 12, 2011)

Lemontree1 said:


> Hi
> 
> I'm brand new to this forum and joined because we are moving to the US from the UK after Christmas. I'm on a secondment from my company for an indefinite period, living and working in NJ.
> 
> ...


Hi Andy, we purchased a house with less than a years US credit history, so it is possible. My advice would be:

Talk to a lender early, before you even start looking for a house. Check and double check that they will take into account your bonuses as income and that they will lend you the amount they say they will. They have a nasty habit of changing the rules at the last moment when you have committed to a property...
If you have a rental property in the UK, they will want to see the letting agreement and the regular income coming into your bank account for this, plus your tax returns.
Get a UK credit report from a global company (e.g Experian or Equifax)
If you are transferring funds, start consolidating them into one bank account early. They will want to track back the source of the money for at least 2 months. If your bank statement shows an amount being paid in, they will want to see where it came from. If that bank statement shows any other amounts coming in, they will want to see where that came from and so it goes on.... If you have the money all settled in one place beforehand and it has been there for several months, it will make your life a lot easier.
The usual stuff - paystubs, evidence that you are up to date on your existing mortgage, if applicable. If you are renting in the US, they will want to see the cleared rent checks, so don't pay cash, or if you do, get a receipt.
Get yourself a good realtor.
Hope this helps.
Rachel


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## vegasboy (Apr 28, 2010)

Does paying your Power and light Account and yearly property taxes also add to a positive credit score? I have a check account with Wachovia and a debit card, the latter which I hardly use. From what I gathered you cannot get a US credit card without a social security number? I paid cash for my condo but I guess that doesn't mean a thing when it comes to a credit score.


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## RealMonkey (Jun 12, 2011)

vegasboy said:


> Does paying your Power and light Account and yearly property taxes also add to a positive credit score? I have a check account with Wachovia and a debit card, the latter which I hardly use. From what I gathered you cannot get a US credit card without a social security number? I paid cash for my condo but I guess that doesn't mean a thing when it comes to a credit score.


I got a secured credit card as soon as I arrived, with no social security number. It helps demonstrate how you manage "credit" . You have to obviously tie up some of your own money with a secured card, but it does help build your score. Yes, paying the utilities adds to your credit score, as far as I am aware. I hear a good way to build your credit score up rapidly is to take out partial credit on a large purchase, and pay it off straight away but I'm not sure how easy it is to do that. I found my credit score went up to over 700 after 1 year by just having a secured credit card and bank accounts. None of the utilities were in my name at that time.


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## vegasboy (Apr 28, 2010)

RealMonkey said:


> I got a secured credit card as soon as I arrived, with no social security number. It helps demonstrate how you manage "credit" . You have to obviously tie up some of your own money with a secured card, but it does help build your score. Yes, paying the utilities adds to your credit score, as far as I am aware. I hear a good way to build your credit score up rapidly is to take out partial credit on a large purchase, and pay it off straight away but I'm not sure how easy it is to do that. I found my credit score went up to over 700 after 1 year by just having a secured credit card and bank accounts. None of the utilities were in my name at that time.


 Where can one check your credit score without a social security number. Thanks for the info...


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## RealMonkey (Jun 12, 2011)

vegasboy said:


> Where can one check your credit score without a social security number. Thanks for the info...


You could try getting a credit report from your US bank. The bank used a company who compiled ours by having a telephone interview with my husband and looking at the little history we had. I think they also took into account the UK credit report. They will undoubtedly charge for this service. By this point however, we both had social security numbers, although I had not had mine very long.


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## lloydcalwin (Apr 10, 2013)

We already own several house in the us Florida which are all rented we are looking now to buy a family home any one have ideas about were to get mortgages we have been with Wells Fargo now for number of years we have no us credit cards but thinking about getting some on our next trip we did speak with First Florida and HSBC but they had very hard requirements which we expect Wells Fargo is no Longer doing non resident Mortgages 

Thanks


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## Davis1 (Feb 20, 2009)

if you don't have a SSN therefore no credit rating.. you will have great difficulty


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## Mungo (Apr 8, 2013)

For me I couldn't get a mortgage or financing for my car for any longer than the period of my Visa. Because my Visa is 3 years for now I could only get vehicle financing if I paid it off over 3 years. 

So going on that you could get a mortgage, there are companies that facilitate it for an international person, but you'd have to pay it off in the period of your Visa.


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## brit cism (Aug 4, 2011)

Mungo said:


> For me I couldn't get a mortgage or financing for my car for any longer than the period of my Visa. Because my Visa is 3 years for now I could only get vehicle financing if I paid it off over 3 years.
> 
> So going on that you could get a mortgage, there are companies that facilitate it for an international person, but you'd have to pay it off in the period of your Visa.


I have 2 years left on my visa and just signed a 30 year mortgage....


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## twostep (Apr 3, 2008)

brit cism said:


> I have 2 years left on my visa and just signed a 30 year mortgage....[/
> Good for you! What is the rest of the story?


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## brit cism (Aug 4, 2011)

Ah yes, the rest of the story, you can get a mortgage much longer than the length of the visa, I was going to post the link but I am too new here to do so, rules I was given, 1 30 percent down ( if own other property's) 2 provide uk and USA tax returns 3 provide 2 years of mortgage statements. I was offered by Fargo, imortgage and benchmark


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## siberiansun (Apr 22, 2013)

Hey all, does anyone have any experience getting a mortgage without a W2 or 1099? I'm a US citizen working abroad on a rotation schedule, and my company doesn't provide either to us... Are our only options multi-national banks with high down payments (~30%)? Any experience or advice is much appreciated.


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## twostep (Apr 3, 2008)

siberiansun said:


> Hey all, does anyone have any experience getting a mortgage without a W2 or 1099? I'm a US citizen working abroad on a rotation schedule, and my company doesn't provide either to us... Are our only options multi-national banks with high down payments (~30%)? Any experience or advice is much appreciated.


20% down is the rule of thumb unless you qualify for specific programs such as VA. You have US tax returns and should receive some documentation about your earned income from your employer.


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## siberiansun (Apr 22, 2013)

twostep, lenders are telling me that even with 20% they'll need a W2. Are there any options to get around that that you're aware of?


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## Bevdeforges (Nov 16, 2007)

You could, I suppose, offer them whatever document your employer gives you to confirm your annual salary. But you may find some resistance to anything other than a stock standard W-2, since the lack of one indicates that you spend significant time outside the US (and outside their jurisdiction) should you fall behind on payments. 
Cheers,
Bev


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## twostep (Apr 3, 2008)

siberiansun said:


> twostep, lenders are telling me that even with 20% they'll need a W2. Are there any options to get around that that you're aware of?


Too much factors into underwriting decisions to discuss this here. Once you find the house of your dreams your realtor should have brokers he occasionally works with. Discuss with him/her the difference broker/mortgage lender.


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## siberiansun (Apr 22, 2013)

twostep said:


> Too much factors into underwriting decisions to discuss this here. Once you find the house of your dreams your realtor should have brokers he occasionally works with. Discuss with him/her the difference broker/mortgage lender.


I probably should have mentioned that we're already under contract. We were pre-approved before we made our offer, but now we're having this problem. I understand that there's a lot too it, but I can't seem to find anyone that'll work with us without the W2...

Also, I'm out of the country ~70% of the time, but my wife will be living in the condo for most of the year.


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## siberiansun (Apr 22, 2013)

Found a solution finally. My Father in Law will be the primary mortgage holder with us as cosigners on an owner occupied investment property. It's not ideal, but it gets us into the condo and at a good rate. We can always refinance to get the mortgage in our names later if we want/need to.

Also, it turns out there is a way to use income abroad for a Fannie Mae loan. You just need to have 2 years of work experience, which I don't have yet.

Thanks all for the suggestions & help!


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## twostep (Apr 3, 2008)

siberiansun said:


> Found a solution finally. My Father in Law will be the primary mortgage holder with us as cosigners on an owner occupied investment property. It's not ideal, but it gets us into the condo and at a good rate. We can always refinance to get the mortgage in our names later if we want/need to.
> 
> Also, it turns out there is a way to use income abroad for a Fannie Mae loan. You just need to have 2 years of work experience, which I don't have yet.
> 
> Thanks all for the suggestions & help!


I am glad things worked out. One you have your two-year anniversary you may want to look into into a conversion.


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## lloydcalwin (Apr 10, 2013)

Hi Guys i have found a great small bank in Florida which has been very helpful for all us brits and aussie who are looking to get a us mortgage they are ALL IN One Mortgage Lenders give them a go and they will do there best to help have a great weekend


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