Part I discussed the choice of purchasing or leasing. 
Part 2 covered the monetary risks and rewards of purchasing a home.
Part 3 will discuss the options for mortgages and ways around the qualifying process.

Once again, my opening caveat: Everything shared in this section is based on personal experience guiding expats through the sometimes-complicated process of obtaining financing.  I am not a mortgage expert; I’m a real estate broker with experience helping foreign transfers find a good mortgage product.

So, you considered your options -- purchasing or leasing –weighed all the pros and cons,  and decided to buy.   Now you must begin the process of obtaining financing.  This process is described in four steps below. 

You should begin planning to qualify for a loan before arriving in the U.S.   Keep financial records in your possession upon transfer and do not pack them in your ocean freight. Obtain employment verification from your HR department since most lenders will request it.  As soon as you arrive in the U.S., apply for a social security number; it will be necessary for many of the transactions you will need to complete.

Before shopping for loan options, consider your goal for purchasing.  Do you want to leverage as much as possible or do you intend to build equity in the home?  Will you want to keep your home long term as an investment property or will you sell when you return to your home country?  Also make sure that you know and understand your company’s terms and conditions for housing.  For instance, receiving an allotment may eliminate the tax advantages of a mortgage.

Next, decide on the type of loan.  Some lenders will offer what is called an “in-house” loan.  The advantages of this kind of loan include flexibility, ease of transaction and the ability to finance 90-100% of the value of the home.  These loans usually carry a higher interest rate, however, and the borrower must normally have a high level of income and position with the company to qualify. Because of the high interest rate, borrowers who choose this option often decide to refinance with a conventional loan at a later date.

Conventional loans come in two basic kinds: fixed rate and adjustable rate mortgages (ARM).  Either type of conventional loan will have the advantage of a lower interest rate than an “in-house” loan. In the past, an ARM would usually give the borrower the lowest possible rate.  Currently, however, rates on ARM's are roughly the same as on fixed rate mortgages.  Borrowers who intend to keep the property as an investment should stick with a fixed rate mortgage.  One disadvantage of the conventional loan is the extra paperwork required to process them (see information at end of article).  Often the lender will need to “create” a credit history for the borrower based on his financial records from his home country. 

The most important advice  I can share is to choose a lender who has experience financing international clients.  Many lenders will say they have the ability to process your loan when in reality they have no idea what it will take to create a credit file for an international expat with no U.S. credit.  On the other hand, from my experiences, there are a number of lenders in Greenville who have provided great service to accommodate the international buyer. 

Please let me know if I can be of any assistance with your purchase or if I can answer any questions as you find your way through the qualifying process. 
 

Examples of information needed for an international to qualify for a conventional loan are as follows: 

Residency documentation

1. Acceptable INS visa numbers: B-1, B-2, E-1, E-2, G-1 to G-5, I, J-1, J-2, O-1 and R-1
2. A social security number or a copy of IRS form W-8BEN “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholdings”
3. Current copy of passport

Credit documentation – One of the following is required:

Foreign credit report from country of origin:

1. Minimum of three (3) credit sources required
2. 24 month history required
3. Minimum of two (2) national repositories required
4. Must be completed or translated in English  

Credit letters:

1. Original letter required
2. Minimum of three (3) letters required
3. Must be from a lending institution located in the borrower’s country of origin
4. Must be completed or translated in English

Non-traditional credit:

1. Minimum of four (4) sources are required
2. Minimum of three (3) sources are acceptable if one (1) of the sources is for rental payments

Employment documentation 

Full documentation requires the following:

1. Income must be converted into U.S dollars
2. Salaried borrowers: W-2s (or equivalent), pay stubs, written VOE, letter from borrowers employer that states monthly income for the previous 2 years.

Reduced documentation requires the following:

1. Income must be converted into U.S. dollars
2. Salaried borrowers: Letter from borrower’s employer covering a 2 year period that states they are currently employed

Assets/funds for down payment documentation 

1. Funds from foreign banks must be transferred prior to closing to a U.S. depository institution and evidence of the transfer is required
2. A minimum of two (2) months PITI reserve or the program minimum (whichever is more) is required
   

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