The Need for a Credit History

            No good credit history, no good lending rates.   You will normally need a good credit history to get the best rates on the secondary mortgage market.  Your credit history also determines your car loan rate.  Don’t count on substitutes: the mortgage companies normally will not recognize activity from other countries, and lending companies rely on your credit number more than assets. 

Choose the Right Home with Resale Values in Mind

            Since the typical expat only holds a home for an average of 3-5 years, resale values should be one of the main considerations when purchasing. As in all real estate, location is the key. For example, school zonings should be considered even if there are no children or if the children will attend private schools.
Also, an expat should try to think like an American when purchasing the home. What features will the typical American family value in the future? A good real estate agent can help you with these questions.

Choose a Solid Local Lender with Low Fees

            Based on my experience with working with international purchasers, the choice of lender is paramount for maintaining one's sanity! There are many lenders who say they can assist with international purchasers. However, it is best to go with someone who has a lot of experience and understanding on how to prove credit without an American credit history or when using a newly obtained Social Security number. The best service my purchasers have received has been from small local bankers who are experienced when working with unconventional credit histories. Some of these banks can provide "in-house" loans for the short term until an expat can qualify for the secondary market while only charging fees once.
Also consider shopping for lower fees compared to looking for the lowest rate. Lower origination and loan acquisition fees probably provide better savings than fighting for 1/8 of a point. Your lender and real estate agent can show you those break even points depending on your assumed time frame for holding a property.

Discuss Taxes with an Experienced International Tax Advisor before Purchasing

          It is highly recommended that you understand the tax implications of a home purchase before you buy or sell a home. One of the main advantages of owning a home in the US is that interest and taxes are normally a deductible expense. Depending on a company’s allotments or benefits, these deductions may not apply. It is also wise to know how the sale of the home at the end of the contract may impact taxes both here in the States as well as in the home country.

Wetzel Realty can help making international home purchases as pain-free as possible. We have partnered with experienced professionals who specialize in international lending, tax advising and legal terms and conditions.

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