Reunion Resort Vacation Investment Home

For most of us, a mortgage is an essential element of home ownership.
Gone are the days of crazy deals and ridiculously easy mortgage processes.
We now live in an era of a ‘post-crash’ era of responsible lending.

Mortgages need specialist advice and we strongly urge potential home buyers to seek sound opinion well in advance of that search for a dream home.
Armed with a ‘pre-approval’ your spending power and negotiating power is significantly enhanced!

USA/Canadian Residents – General Mortgage Application Advice

Affordability Ratio (Monthly Repayment/Monthly Earning)
Your debt to income ratio, which is the ratio of your gross monthly income (before income tax) and your monthly commitments, such as mortgage, property tax, home insurance and any other long term debts you may have, such as car loans, credit cards etc.
Most lenders will allow up to 40% ratio, including the cost of the new mortgage, tax and insurance.  For example, if you earn $5,000/month, you may be approved a mortgage with monthly repayments of $5,000 x 40% = $2,000/month

How Much Can You Borrow?
A buyer needs to typically find 25% of the purchase price, including any closing costs.
Mortgages are normally available to a maximum of 80% of the appraised value, depending on the type of property and intended use.
You should allow up to 5% of the purchase price to cover closing costs i.e. purchase stamps and taxes, legal fees, insurances, lender fees, escrow deposits etc.

General Notes For USA Resident Mortgages
There are no age restrictions, so most mortgages are for a 30 year term, regardless of your age.
Many realtors or sellers will not accept an offer, unless it can be proven funding is in place or has been Pre-Approved. For the purchase of a re-sale property, the closing date will typically be set at 30-45 days after the signing of the sales contract, and most contracts will impose financial penalties for late closing. Therefore it is important to make sure you have prepared fully. Here is a list of things you will need to know or provide:

  1. Proof of Identification
    Good quality copy of passport and driving license, or other photo ID. Two forms of photo ID are normally required.
  2. Proof of Income
    Proof of income for employees. Latest pay slip and last 2 years tax certificate to confirm salary (1040 and W2). For self-employed 2 years personal tax returns (1120 and 1040) and maybe CPA reference to confirm last 2 years personal income and year to date income.
  3. Proof of Deposit and Funds to Close
    Copies of last 60-90 days bank statements showing source of deposit or mortgage reserves in the case of a refinance. Any large deposits must be sourced. This means that additional bank statements maybe required to show where funds have originated from within the 60 day period. For example if you have transferred funds from an investment account, or business account (a letter from CPA required to confirm use of these funds will not affect profitability of the business), you will need copies of these bank statements as well. If any of the deposit is “gifted”, a letter must be obtained to show that the funds are a genuine gift and are not repayable. To avoid this complication is can be advisable to have funds sitting in a separate account 60 days prior to application.
    Most lenders will also want to know that you have a minimum of 12 months mortgage reserves (principal and interest, property taxes and insurance) for both main residence and new purchase.
  4. Credit History
    These can usually be applied for on-line via someone such as Credit Karma, as this will not leave a footprint on your credit. Copy of latest Property Tax bill or equivalent and home insurance policy showing premiums are paid. If you own additional properties, tax and insurance will be required for these also. If living with relatives, a letter explaining that housing costs are covered by relatives. Try to avoid applying to numerous lenders, as any hard pulls on credit will affect your FICO score.
    A credit history spanning at least 2 years will usually be required for a USA based resident mortgage.

Overseas Residents – General Mortgage Application Advice

Affordability Ratio (Monthly Repayment/Monthly Earning)

Most lenders specializing in non resident mortgages will allow up to 40% ratio, including the cost of the new mortgage, tax and insurance.
When considering the purchase of a property in the USA, preparation is the key.
The first thing that should be established is your budget.
This is normally calculated in two ways.
Firstly by looking at the funds you have available, typically 25% of the purchase price, including closing costs.
Secondly your debt to income ratio, which is the ratio of your gross monthly income (before income tax) and your monthly commitments, such as mortgage, property tax, home insurance and any other long term debts you may have, such as car loans, credit cards etc.

How Much Can You Borrow?
Mortgages are normally available to a maximum of 60-70% of the appraised value, depending on the type of property and intended use. You should allow up to 5% of the purchase price to cover closing costs i.e. purchase stamps and taxes, legal fees, insurances, lender fees, escrow deposits etc.

Other Things To Note
There are no age restrictions in the USA, so most mortgages are for a 30 year term, regardless of your age.

Get Prepared to Before You Make an Offer 

Many realtors or sellers will not accept an offer, unless it can be proven funding is in place or has been Pre-Approved. For the purchase of a re-sale property, the closing date will typically be set at 30-45 days after the signing of the sales contract, and most contracts will impose financial penalties for late closing. Therefore it is important to make sure you have prepared fully. Here is a list of things you will need to know or provide:

  1. Proof of Identification
    Good quality copy of passport and driving license, or other photo ID. Two forms of photo ID are normally required. Also required to show that you can legally travel to the USA via a copy of visa or ESTA.
  2. Proof of Income
    Proof of income for employees. Latest pay slip and last 2 years tax certificate to confirm salary (P60/W2 equivalent). Also, a letter from your employer on headed paper, confirming your start date, job titleand last 2 years income (will cross reference with tax certificate) and year to date income (will cross reference with YTD on latest pay slip). For self-employed 2 years personal tax returns (SA100 orequivalent) and accountants reference to confirm last 2 years personal income and year to date income.
  3. Proof of Deposit and Funds to Close
    Copies of last 60-90 days bank statements showing source of deposit or mortgage reserves in the case of a refinance. Any large deposits must be sourced. This means that additional bank statements maybe required to show where funds have originated from within the 60 day period. For example if you have transferred funds from an investment account, or business account (a letter from accountantrequired to confirm use of these funds will not affect profitability of the business), you will need copies of these bank statements as well. If any of the deposit is “gifted”, a letter must be obtained to showthat the funds are a genuine gift and are not repayable. To avoid this complication is can be advisable to have funds sitting in a separate account 60 days prior to application.
  4. Playing Safe
    Most lenders will also want to know that you have a minimum of 12 months mortgage reserves (principal and interest, property taxes and insurance) for both main residence and new US purchase. This can, in most instances, be in your country of residence.
  5. Credit History
    Copy of Equifax or Experian Credit report or similar credit bureau from country of residence. These can usually be applied for on-line. Alternatively, if your country of residence does not have a credit bureau,two credit references may be accepted. Credit lines must have at least 24 months payment history, and should have been held within the past 24 months. Suitable lines are mortgages, rent, loans, creditcards etc. Copy of latest Property Tax bill or equivalent and home insurance policy showing premiums are paid. If you own additional properties, tax and insurance will be required for these also. If livingwith relatives, a letter explaining that housing costs are covered by relatives.
  6. US Bank Account
    You should open a US bank account as soon as practical. Some lenders may require funds to be in a US bank account prior to purchase
  7. Currency Exchange
    If moving funds from your home country to the USA, it is beneficial to register with a currency exchange company, as in most instances they will be able to exchange at rates more favorable than you own bank
  8. Register for a Tax Identification Number
    Some lender may require you to have a US tax identification number, ITIN# either before you complete the purchase or to have at least applied for one. This can be done via a specialist accountant (CPA), who is registered to do this service with the IRS.
  9. Know where you will be to sign closing documents
    Confirmation of how you intend to close i.e. in person in the USA, via a Power of Attorney, or in country of residence via an approved Notary Public, or in the US Embassy or Consulate. Not all lenders will accept a foreign notary, so you may need to forward book an appointment at the US Embassy, which normally has to be done on-line and booked several weeks in advance.

Top 10 Tips When Your Mortgage Has Been Pre-Approved!

So you mortgage has been approved and your closing date has been set.
Congratulations!
However even at this stage your loan could be denied for any number or reasons.
Here are the most common…………..

  1. Do not change your job, become self-employed or quit your job
  2. Do not buy a new car, truck or van
  3. Do not use credit cards excessively or let accounts fall behind
  4. Do not spend funds sets aside for deposit and closing costs
  5. Do not omit debts or liabilities from loan application
  6. Do not buy furniture
  7. Do not originate any enquiries into your credit
  8. Do not make any large deposits into your bank account, without first checking with your loan officer
  9. Do not change bank accounts
  10. Do not co-sign a loan for anyone

Some Useful Specialist Resources For Florida Home Buyers

Orlando Home Buyer Guide Articles – Click the titles to read more

  1. Decide what the home will really be used for!  It pays to be open minded!
  2. Top 10 Considerations for an Orlando Vacation Home!
  3. Choosing the right floor plan and features!
  4. Homes Close to Disney, an insider’s views about location!
  5. Finding the right community for you, your family, your guests.
  6. Renting your home, an emotional but wise decision!  Free vacations forever!
  7. Don’t buy a home unless these features are included!
  8. Furnishing and decor, are the key to lots of bookings!
  9. Should you pay cash or get a mortgage?
  10. Mortgage advice for US Residents and Overseas owners
  11. Choosing a good property manager to take care of your home
  12. What could possibly go wrong – Being prepared makes a difference!
  13. Things to Worry About When Buying an Orlando Home!
  14. Dealing with the taxes and other boring but essential stuff!
  15. Getting A Visa Or Green Card to Live in Orlando!

Contact Our Realty Team Now and Let us Find You Your Dream Home!

407 973 1456
Info@totalorlandorealty.com

TotalOrlandoRealty LLC
7345 W Sand Lake Rd
Orlando, FL 32819

www.totalorlandorealty.com

Reunion Resort Homes For Sale

If you are looking for a high level of financial return and an outstanding vacation experience for you and your guests, check out the Reunion Resort Homes for Sale.
There’s simply nowhere like Reunion Resort for a luxury vacation rental.
If you are searching for vacation rental homes to book, then visit our Reunion Resort Rentals Booking site here!