Purchasing Real Estate as a Foreign Buyer


Foreign purchasers of real estate will likely encounter financial hurdles and other red tape. Read on to learn how foreign buyers can overcome these obstacles when making their purchase.

Finding real estate in the United States isn’t seamless. One substantial obstacle centers on the actual purchase of real estate—especially if you are a buyer from outside the United States.

Ultimately, it can be frustrating and discouraging. The dreams of purchasing real estate in the United States can fade due to significant amounts of red tape.

That said, this isn’t impossible. It is certainly possible for foreign buyers to purchase real estate, so long as they understand and prepare for some of these procedural steps. Alternatively, they can take advantage of services like Bank of England Mortgage that make the process much more seamless.

Whichever route you choose, you must be patient. It may take some time. By being patient, however, you will be on your way toward finding new real estate in the U.S.

Navigating the Financing Landscape

Before purchasing real estate as a foreign buyer, there are several things to keep in mind.

The first issue centers on obtaining a mortgage. While the process is relatively straightforward for American purchasers, there are some additional requirements that foreign purchasers must meet. For instance, if a foreign buyer approaches a bank to obtain a mortgage, they will likely need to provide a valid visa, a social security number, and have access to U.S. credit. Other banks may also require credit references from several financial institutions and verification of employment. Ultimately, as with any major purchase, foreign purchasers will want to read the fine print in order to determine their obligations.

That said, there are some additional requirements in particular which may prevent foreign buyers from going forward with their purchase. Some large financial institutions may require asset seasoning on U.S. soil. They also may require a depository relationship. While these hurdles are not impossible to overcome, they are more things that foreign purchasers have to handle as they purchase their U.S. real estate.

This is where a foreign purchaser may want to rely on a third-party to help them bypass some of these requirements. For instance, Bank of England Mortgage offers a wide range of services that make the purchase process extremely easy for foreign buyers. Foreign buyers do not need U.S. credit, a social security number, or even tax returns. As for income verification, Bank of England Mortgage offers less onerous requirements. Instead of years upon years of income verification, Bank of England Mortgage only requires a letter from a foreign purchaser’s employer or CPA. All that is required in the letter is a breakdown of two years of the purchaser’s income in their local currency, along with its conversion into U.S. dollars. That said, if the foreign purchaser has liquid assets that exceed 110 percent of the purchase price of the real estate, Bank of England Mortgage does not require income verification.

This is just one example, but the fact remains that a third-party service like Bank of England Mortgage can make this process much easier. In other words, these services can remove some of these requirements off of your plate so that you can more quickly move forward with your purchase.

The Allure of Cash

Because of these additional requirements, a foreign purchaser may think that the benefits of obtaining a mortgage do not outweigh the costs. Obtaining a mortgage takes time for everyone, but especially if you are a purchaser from outside the United States. Therefore, it becomes all too tempting to use cash to purchase the particular piece of real estate.

But having said this, using cash to purchase U.S. real estate prevents a foreign purchaser from capitalizing on the inherent benefits of a mortgage. A mortgage provides inherent leverage. Through this leverage, foreign buyers can take advantage of greater purchasing power while allowing them to preserve their liquidity. With a mortgage, a foreign purchaser can also obtain tax benefits, as mortgage interest can be tax deductible in certain situations. These are just two examples, but there are many more. While there are obviously inherent costs to obtaining a mortgage, the benefits for most borrowers exceed those costs.

Notwithstanding the benefits of a mortgage, however, some purchasers may wish to go forward with cash. Sometimes, there may not even be a choice if a bank or other financial institution declines a foreign purchaser’s application. If this is the case, the foreign purchaser will need to find a substantial amount of cash to go forward with the purchase.

But by having to use cash, these foreign purchasers may encounter another difficult problem. Some foreign borrowers simply aren’t able to get cash out of their home countries. One obvious example is in China, where Chinese authorities haven’t hesitated to limit the amount of cash that Chinese citizens can take out of the country. Even though a foreign buyer may have the capital to purchase real estate in the U.S., he or she may not be able to actually proceed with the purchase.

Once again, a lender like Bank of England Mortgage can help with this specific problem. Bank of England Mortgage allows for 100% of a cash down payment to be provided as a gift. This way, a foreign buyer may be able to avoid some of the cash transfer restrictions in certain countries. It is a creative solution to an ongoing problem that many foreign purchasers face.

Therefore, a company like Bank of England Mortgage can be a vital asset if a foreign buyer wants to use cash in the purchase. Even though he or she will be passing up on some of the key benefits of a mortgage, cash purchases aren’t impossible. The purchaser will simply need to be prepared for some obstacles and, if necessary, rely on a third-party organization.

Overcoming Numerous Hurdles

Before doing so, however, you have to overcome this hurdle of actually purchasing your real estate. As we have described above, there are some hurdles that you will have to overcome when obtaining a mortgage. They aren’t impossible to overcome, however. It takes patience and the willingness to reach out for assistance if necessary.

At Bank of England Mortgage, we are happy to guide you with this process. Whether you are purchasing your first piece of real estate in the U.S., or not, we can help you as you make your purchase. Simply put, Bank of England Mortgage is a terrific choice for foreign buyers who are looking for simple, straightforward mortgage financing with minimal restrictions. If you have any questions or would like to move forward, don’t hesitate to contact us. We look forward to hearing from you!

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