Buying California real estate as a non-U.S. resident is possible with the right mortgage. There are a number of lenders that offer loan programs to foreign buyers, but it must be carefully planned. At LBC Mortgage, we specialize in helping foreign buyers obtain their financing with ease.

Understanding Mortgage Options for Non-U.S. Residents

There are several types of loans for non-U.S. residents purchasing California real estate: foreign national loans, portfolio loans, and debt-service coverage ratio (DSCR) loans offer options for buyers without U.S. credit or traditional income documentation.

Foreign National Loans

These loans are established for buyers who are not based in the United States. Foreign national loans do not require a Social Security number or U.S. credit history. Lenders establish financial stability through the utilization of bank statements, foreign credit reports, and income verification from the buyer’s home country. Loan terms typically require a 30% down payment with an interest rate slightly higher than conventional loans.

Portfolio Loans

Portfolio loans are provided by private lenders or banks that keep loans in portfolio and do not sell them on the secondary market. This provides room for underwriting flexibility to accommodate the borrower’s financial circumstances. These loans are suitable for non-U.S. citizens who possess a lot of assets but little U.S. financial documentation.

Debt-Service Coverage Ratio (DSCR) Loans

A DSCR loan takes into account the property’s income potential instead of the borrower’s income. The lenders provide such loans based on whether or not the mortgage payments are covered by the potential rental income. This product is ideal for investors looking to purchase California investment rental properties.

Mortgage Requirements for Non-U.S. Residents

Lenders require a few things from non-U.S. citizens in order to qualify for a mortgage. The most common are a valid passport, U.S. bank account, income documentation, a significant down payment, and reserves.

Proof of Identity and Legal Status

A valid passport and visa (if applicable) are absolute requirements. While a green card or work visa can assist in qualifying for more favorable loan terms, most lenders make loans to foreign nationals without U.S. residency status.

U.S. Bank Account and Financial Reserves

Foreign nationals must establish a U.S. bank account to facilitate mortgage payments. Lenders also demand reserves, six to 12 months of mortgage payments, in a U.S. or international bank account.

Income and Asset Documentation

Lenders verify income using tax returns, letters from employers, or foreign bank statements. Alternative documentation is permitted for certain loans, such as rental income from other properties or investment portfolios. The stronger the financial profile, the greater the probability of approval and more favorable loan terms.

Down Payment Requirements

Down payment for foreign national loans ranges from 25% to 40%. The higher down payments reduce the lender risk and increase the chances of loan approval. Cash reserves also strengthen a borrower’s financial situation.

Steps for Obtaining a Mortgage in California

A mortgage for a non-U.S. resident must follow a predetermined course. Each step is comprehended to facilitate a smooth transaction.

Deal with an Experienced Mortgage Broker

U.S. mortgage guidelines can be complex. It is simpler with a broker like LBC Mortgage. Our team specializes in foreign national loans and connects purchasers with lenders that offer the most favorable terms.

Get Pre-Approved

A pre-approval letter strengthens offers when buying property. It shows sellers that financing is in place and speeds up the transaction. Pre-approval requires the submission of financial documents and the completion of an evaluation by a lender.

Choose a Property and Make an Offer

After being pre-approved, buyers can actively search for properties. It is helpful to work with a real estate agent familiar with foreign buyers to assist with legal and financial matters. When making an offer, sellers prefer buyers who have secure financial backing.

Complete Loan Application and Underwriting

After an offer is accepted, the loan application is initiated. Lenders review financial documents, property details, and credit history. Underwriting may last several weeks, depending on document availability.

Close the Loan

Closing on the mortgage involves signing legal documents, transferring money, and recording the title to the property. Non-U.S. citizens may be compelled to appoint a U.S.-based representative or make use of remote notarization services to complete the process.

Why Use LBC Mortgage for Foreign National Loans?

LBC Mortgage has extensive experience in helping non-U.S. residents with home financing. Our lender network is highly competitive in terms of rates and loan programs. We guide the buyer through every step of the process for a seamless experience.

The California real estate market presents excellent opportunities for international purchasers. With the right mortgage and proper guidance, state homeownership is achievable. LBC Mortgage simplifies the process and helps non-U.S. citizens live their dream of homeownership.