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Money matters....!

Money matters....!

Old May 17th 2013, 2:00 pm
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Default Money matters....!

Hi,
I'm moving to Hollywood, FL at the end of the year with my husband and 2 young children. My husband is coming over on an 0-1 visa and will be employed by a company but we are just after some info to help us work out financing.

I've read the Fatbrit guide but wondered if anyone had any experiences they could help out with. We'd like some info on the following:

-MORTGAGE: Do you need to build up 2-3 years of credit history before you can get a mortgage? As a non-US citizen, will we have to pay a stupidly high interest rate on a mortgage even after that time?
- PROPERTY: We obviously want to buy a property ASAP, does anyone know roughly how much you need to put down as a deposit? We can then see if we will need to sell our UK home.
- CAR FINANCING - Can you get this quite easily with proof of your income/UK credit history?

Thanks in advance everyone and hopefully you can help....
Laura
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Old May 17th 2013, 2:14 pm
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Default Re: Money matters....!

Originally Posted by laurajackson View Post

I've read the Fatbrit guide but wondered if anyone had any experiences they could help out with.
to BE. This sentence will have made a lot of people smile this morning, so thanks.

Anyway, we have just bought after almost 3 years here. After that time we got a pretty good interest rate. As we are in Texas though there will not be much point going into many details. I'm sure someone else will be along soon.
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Old May 17th 2013, 2:37 pm
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He really did leave a lasting impression didn't he

to BE!
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Old May 17th 2013, 3:45 pm
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Default Re: Money matters....!

MORTGAGE: No interest rates need not be too crazy, and will drop quickly as you build credit history, and if you have enough down-payment can be quite reasonable immediately.
PROPERTY: "Obviously" you would want to buy ASAP, but that might be a huge and expensive mistake. You need to know neighborhoods, commute times, schools, and which shops and services you'll be frequenting. Also transaction costs in buying and selling house are substantial in the US, so if you're only coming on a visa, and only likely staying 2-3 years, you could lose money even in a rising market. Please think very carefully before committing to buy.
A "normal" deposit is 20%, with no credit history, more would be better, so if you do decide to buy quickly, 30% might be a better starting point to get a decent interest rate. .... I still say "don't do it" though.
CAR FINANCING: Go search for International Autosource, and the numerous threads here on BE discussing IA. The services they provide to finance or lease vehicles are every bit as good as they seem. Many here on BE have used them, including me, and if you finance a vehicle through IA you will be building credit history from day one!

Last edited by Pulaski; May 17th 2013 at 3:50 pm.
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Old May 17th 2013, 4:11 pm
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Default Re: Money matters....!

I know the word is engrained in the British psyche, and at a minimum must be used in no less than every other sentence, but try to be aware that what's obvious to you is not at all obvious to uninformed third parties - in particular US immigration officials.

Beyond that, what Pulaski wrote.

Regards, JEff
Originally Posted by laurajackson View Post
We obviously want ...
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Old May 17th 2013, 4:17 pm
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Default Re: Money matters....!

One thing im not clear about International Autosource is how they check your credit worthy in the first place. Do they use your UK history?
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Old May 17th 2013, 4:18 pm
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Default Re: Money matters....!

Originally Posted by laurajackson View Post
Hi,
I'm moving to Hollywood, FL at the end of the year with my husband and 2 young children. My husband is coming over on an 0-1 visa and will be employed by a company but we are just after some info to help us work out financing.

I've read the Fatbrit guide but wondered if anyone had any experiences they could help out with. We'd like some info on the following:

-MORTGAGE: Do you need to build up 2-3 years of credit history before you can get a mortgage? As a non-US citizen, will we have to pay a stupidly high interest rate on a mortgage even after that time?
- PROPERTY: We obviously want to buy a property ASAP, does anyone know roughly how much you need to put down as a deposit? We can then see if we will need to sell our UK home.
- CAR FINANCING - Can you get this quite easily with proof of your income/UK credit history?

Thanks in advance everyone and hopefully you can help....
Laura
I would wait at least a year/18 months before deciding to buy - get to know the areas that you live and work in. Nothing worse than buying a house in an area that you end up not wanting to be in for whatever the reasons. Also, with kids, you need to research the school districts if they are going into the system.

The better your credit the less you will pay in interest. You should put down at least 20%.

If you have a bank account with HSBC they can be very helpful in setting up an account overseas and giving you a debit and credit card to get your credit going. If you have an AmEx card they can do a Global Transfer for you and give you a US based card - this will help your credit.

Nobody here cares about your credit in the UK. However, VW, BMW and Audi all have special leasing plans for overseas buyers here on a visa. Search the forums for details. Worth looking at. This will also help your credit.

Note that I believe you will not show up on any credit checking systems until you have your social security number (can someone else confirm that?) so get that as soon as you are able (wait at least 10 days after arrival).

You should take your local driving test asap so that the insurance will be a bit easier to get.

Look through some of the sticky forums: there is a ton of practical advice. Good luck.
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Old May 17th 2013, 4:24 pm
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Default Re: Money matters....!

Originally Posted by civilservant View Post
One thing im not clear about International Autosource is how they check your credit worthy in the first place. Do they use your UK history?
I don't know, but whatever they do enables them to offer the same terms offered to existing US residents in the US. ..... So I would have to presume "yes" they are accessing credit records outside the US.
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Old May 17th 2013, 8:07 pm
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Default Re: Money matters....!

Originally Posted by laurajackson View Post

-MORTGAGE: Do you need to build up 2-3 years of credit history before you can get a mortgage? As a non-US citizen, will we have to pay a stupidly high interest rate on a mortgage even after that time?
- PROPERTY: We obviously want to buy a property ASAP, does anyone know roughly how much you need to put down as a deposit? We can then see if we will need to sell our UK home.
- CAR FINANCING - Can you get this quite easily with proof of your income/UK credit history?
Mortgage - Sure, if you've a big enough deposit. Thing is, no credit history means you'll struggle for a regular loan and get craps rates. How much you put down will depend on the local market and how much the places are going for, but 30%+ is a good start, more so with no history.

But it's a crap idea to buy without living in the area for a year anyway, so shouldn't be a problem. Flogging a house will cost you much more here than it does in the UK, which is why you should rent because life style is so much different here and things you just wouldn't even consider can make a huge difference on how you like the house in the end or not.

Car finance is easy. Best way to get varied bit of US history. UK history and driving record doesn't mean shit though.
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Old May 17th 2013, 8:26 pm
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Default Re: Money matters....!

Don't buy unless you have a green card on the way (as in already applied for not just promised for some day), or you could be stuck with trying to unload property quickly if things go belly up.
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Old May 17th 2013, 10:20 pm
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Default Re: Money matters....!

Originally Posted by civilservant View Post
One thing im not clear about International Autosource is how they check your credit worthy in the first place. Do they use your UK history?
You have to still be living in the UK to be able to buy or lease from them.
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Old May 18th 2013, 12:58 am
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Default Re: Money matters....!

Originally Posted by Bob View Post
But it's a crap idea to buy without living in the area for a year anyway, so shouldn't be a problem. Flogging a house will cost you much more here than it does in the UK, which is why you should rent because life style is so much different here and things you just wouldn't even consider can make a huge difference on how you like the house in the end or not.
It's the high transaction costs that make the equation different in the US to the UK, imo, plus as you say the life style and culture are so different. I actually bought in the US before I left the UK - credit was rather easier to obtain in those days - and it worked out ok. But when I moved from east to west cost, I rented for 2 years before buying. And I'm glad I did:- it allowed me to get to know areas so much better and deduce where I'd fit in etc. If I ever moved areas again, I'd almost certainly rent for a while first.

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Old May 18th 2013, 3:58 am
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Default Re: Money matters....!

Originally Posted by Giantaxe View Post
It's the high transaction costs that make the equation different in the US to the UK, imo, plus as you say the life style and culture are so different. I actually bought in the US before I left the UK - credit was rather easier to obtain in those days - and it worked out ok. But when I moved from east to west cost, I rented for 2 years before buying. And I'm glad I did:- it allowed me to get to know areas so much better and deduce where I'd fit in etc. If I ever moved areas again, I'd almost certainly rent for a while first.
We bought very soon after we got here too, but we only lived in it 2 years before we moved. The only reason we bought so quickly was that we saw it in an area we liked and viewed it as our first foot in the door to accumulating rental properties. Well, that was my thought. Wife was massively pregnant and WANTED A NEST TO FEATHER.........NOW!!!!

It worked out OK for us, mainly as we got lucky on both distressed seller when we bought (expat moving out at short notice) and very motivated buyer when we eventually did sell it a few years after we moved out, but if it hadn't been for those factors, we'd have been well out of pocket on the transaction.

I would throw my hat in with all the others recommending renting for a while before buying - it really is just so different out here, and as has been mentioned, the cost of changing your mind is quite hefty.

As an example, we are selling a small studio apartment in downtown for 175k. The "normal" realtor fee for selling that is in excess of $10,000 - that may or may not be negotiable. Add on the Title Insurance, Escrow Fees, Transfer fees and the like and there will be close to a 13k bite out of that sales price. Not exactly chump change.

The other thing to bear in mind is that the cost of home ownership can be pretty steep - Home insurance is more expensive than in the UK, Property taxes can be high (we pay around 4% - think buying your house twice over a 25 year period ), there always seem to be more bills for systems that need servicing that I never remember from the UK - a/c, water softeners, sprinkler systems, pool equipment etc etc...ok, some of those you can do yourself if you have time, but time is in pretty short supply round here....
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Old May 18th 2013, 6:53 am
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Default Re: Money matters....!

Originally Posted by Yorkieabroad View Post
As an example, we are selling a small studio apartment in downtown for 175k. The "normal" realtor fee for selling that is in excess of $10,000 - that may or may not be negotiable. Add on the Title Insurance, Escrow Fees, Transfer fees and the like and there will be close to a 13k bite out of that sales price. Not exactly chump change.
Wow. That's a huge expense to sell. So is that the normal rate in most states or just yours?
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Old May 18th 2013, 11:09 am
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Default Re: Money matters....!

Originally Posted by guitarmaan View Post
Wow. That's a huge expense to sell. So is that the normal rate in most states or just yours?
Estate agents fees are almost always 6% across the US. The British agent Foxton's opened a NY operation a decade ago and was charging 4 1/2%, but I never heard of another full service agent which worked for less than 6%. The problem is that buyers agents (almost everyone uses a buyer's agent) won't take buyers to see houses using a discount agent, BECAUSE the buyers agent collects half the 6% commission. Anyone who has a contract with a buyer's agent (remember everyone uses a buyer's agent!) who wants to buy a discount agent or "for sale by owner" house has to top up the buyer's agent fee to 3%. Can you buy without an agent, sure, I've done it myself twice, but it is pretty rare, and I only did it when I knew the sellers.

Then you have to pay the lawyers on top. Most of those fees, in value terms, get deducted from the sales proceeds. The buyer then has the fees for the mortgage and things like inspections, that run another 2-3%, so "round trip" buy+sell is going to cost around 10% anywhere in the US.
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