Foreign national mortgage

From CEOpedia | Management online

Foreign national mortgage is the same mortgage loan as the classic one but for people who are not permanent. According to Bailey T. "A mortgage for a non-resident is called a foreign national mortgage loan"[1]. A foreigner who is not a United States citizen will in most cases attempt to own a house, apartment, or any other premises. Financing this type of property is not easy for non-United States residents. Refunds on this type of land property are usually carried out by United States banks as well as by mortgage companies for United States citizens. Loans are not only offered to citizens. Lenders are happy to offer their assistance to non-United States residents. Such offers apply not only to residents but also to other temporary residents, foreigners with other temporary or permanent status classifying their stay. The loan program for non-resident foreigners is intended for foreign borrowers who are able to fully document their income and assets or have significant verifiable assets and could use alternative credit qualification methods. The loan program has been structured in such a way as to be able to provide for two interchangeable ways to document the borrower's repayment capacity. The vast majority of borrowers use standard full documentation of assets and income. The borrower can use the asset depreciation rule, which is why he is able to obtain qualified over-income. The Lender's decision is based on the integration of bank statements and income [2].

The Foreign National Products

This program has been designed so that there are two separate qualification options for borrowers in exceptional situations[3]:

  1. First situation - full documentation
  2. Second situation - asset valuation.

In the first situation, the full documentation applies only to borrowers with high credit quality, who are interested in, inter alia, a loan of up to two million dollars,loans must be high balance if you own many financial properties. Assets and revenues must be fully documented.

In the second situation, in which borrowers are determined in terms of asset assessment, the verification concerns liquid loan amounts of up to two million dollars. If there was no employment or no income, the debt ratio was not calculated. This program is about enabling people who do not have full rights as a native resident to be able to acquire rights to real estate thanks to unconventional credit solutions.

Foreign currency mortgage

The phenomenon that appears in many developing European countries involving the use of foreign currency mortgages for the purchase of real estate has been very popular in recent times. The phenomenon that appears in many developing European countries involving the use of foreign currency mortgages for the purchase of real estate has been very popular in recent times. Extensive research shows that the liability for mortgages to a large extent depends on the exchange rate on the day the loan is taken. The potential risk of taking out such a loan is enormous and may cause a significant threat to the economic stability of households. This is not the only danger, it can threaten the entire banking system. However, despite the risks, foreign mortgages are beneficial for the borrower. However, if the exchange rate changes, which is difficult to predict, the borrower may find himself in a very dangerous situation. This can lead to the borrower having to repay a loan several times larger than the one he initially took[4].

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  1. Bailey T. (2019)
  2. Bailey T. (2019)
  3. Bailey T. (2019)
  4. Buszko M. (2016)

Author: Barbara Rojek