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Mortgage info

Mortgage info

Old Nov 28th 2015, 1:04 am
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Default Mortgage info

Hi, my Husband is being relocated to Houston.
We really want to buy a house as we have 2 small children and dont want to be moving them around more than we have to.

We were wondering how do you go about getting a mortgage? We don't have any credit rating for the US, we're told we can't get a US bank account until we get our social security numbers. It is all confusing.

Any info would be really appreciated.
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Old Nov 28th 2015, 1:19 am
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Default Re: Mortgage info

If you have a sizeable deposit, think 30%-40%, you might be able get a mortgage. Wells Fargo seems to have been fairly accomodating to new immigrants and their financial needs.

While I understand your motives to buy a house, I would caution you that doing so might be an expensive and potentially stressful decision. Houses in Texas do not appreciate like houses in the UK, and the round-trip cost of buying and selling a house is usually around 10% (the realtors' (estate agents') fees alone are usually 6%), so unless you live in a house for a minimum of three-five years there is a very good chance that you will lose money on the transaction.

Then there is the cost of repairs and maintenance of American houses - from a British perspective, American houses need a lot of repairs and attention. For starters the heating and AC system typically only lasts around 12-15 years and you can expect to pay $10,000 - $20,000 for a replacement, and the roof on most American houses only lasts 15 or so years; if it lasts 20 years you are doing well - and a new roof can easily cost you $15,000- $25,000. ..... And most of the cost of a new heating/AC system or roof is not reflected in the market price of houses.

Then there is the matter that while on a visa you might have to leave the country at short notice for a number of different reasons (redundancy, corporate reorg, take over, family reasons, homesickness, etc.) and leaving a house at short notice and having to sell it remotely is a sure way to not get a good price for a house.

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Old Nov 28th 2015, 2:46 am
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Default Re: Mortgage info

You can get a US bank account without a social security number. You can't get any type of credit/loan product until you have the social security number though..
I updated some of the info about banking a couple of months ago based on a conversation with my banker. find it here

It is possible to get a mortgage before arriving here, someone recently did it and they may be along shortly to give you more info. As Pulaski says though, make sure you thoroughly investigate pros and cons beforehand. Not sure where he gets his info about Texas real estate, it is going gangbusters here in Austin and since Houston is also rapidly expanding I would imagine that it's not that different there. Buying is cheap - selling is 6% + fixing up the place to be perfect. Look into house tax as well, there is no state income tax here so state funding comes from house taxes and if you're not prepared then that is a shock.

I'll pm you the details of my wells fargo contact for getting a mortgage using your UK credit history.

Come back with more questions if you need to.

How exciting for you!!
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Old Nov 28th 2015, 3:01 am
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Default Re: Mortgage info

Originally Posted by petitefrancaise View Post
...... As Pulaski says though, make sure you thoroughly investigate pros and cons beforehand. Not sure where he gets his info about Texas real estate, ......
Houses in states where there is no shortage of building land, such as Texas, the Carolinas, and Georgia, tend to appreciate much more slowly than states that have limited building land, such as California, New York, Massachusetts, and Florida. There can be localized pockets of price appreciation but that might be a short-term effect, and also might be reversed. ..... I live in NC, where there is also plenty of land where building is allowed, and our house increased in value quite nicely from 2003-2006, around 5% a year, then the market reversed, quite sharply, and then has slowly climbed back over the past five years or so, and our house is only worth about what we originally paid for it. That is very much a risk that you take in buying real estate in a state where many houses are being built - people should not buy a house expecting that price increases can be taken for granted. Can you make money? Sure, but don't bet heavily on doing so!

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Old Nov 28th 2015, 3:17 am
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Default Re: Mortgage info

well, Mr P that may be true... but that's not taking into account the good school districts which tend to have pretty fixed boundaries and high demand.

Bear in mind that the alternative to buying in the OP's case is renting a house which really is money that you aren't going to get back. So, can you buy a house for the same as renting? Sure, it's why we bought so quickly and even with a modest annual increase it's still better value than renting.

Anyway, I can understand why they want to minimise disruption for their family and add to this that whilst the company may pay for their furniture to be moved to the first house, they don't usually cough up again if you then decide to buy....
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Old Nov 28th 2015, 4:08 am
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Default Re: Mortgage info

Originally Posted by petitefrancaise View Post
well, Mr P that may be true... but that's not taking into account the good school districts which tend to have pretty fixed boundaries and high demand.

Bear in mind that the alternative to buying in the OP's case is renting a house which really is money that you aren't going to get back. So, can you buy a house for the same as renting? Sure, it's why we bought so quickly and even with a modest annual increase it's still better value than renting.

Anyway, I can understand why they want to minimise disruption for their family and add to this that whilst the company may pay for their furniture to be moved to the first house, they don't usually cough up again if you then decide to buy....
Go ahead then, fill your boots, there is apparently no downside risk to "investing" in a home in the greater Austin area.

BTW I have one word to strike fear in the heart of the school-district-obsessed home owner investor: "redistricting"
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Old Nov 28th 2015, 9:30 am
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Default Re: Mortgage info

I agree with Pulaski - US houses and the housing market are different enough from the UK that you really need to consider the pros and cons carefully.

There are other factors too - have you done other international relocations, what levels of risk are you comfortable with, how long you intend to stay in the US - that kind of thing. Are you comfortable moving to a new area/country and committing to a house without living there for a while to get a feel for what your lifestyles are going to be like, what's important to you (proximity to roads, shops, schools, parks, transport links etc)

From my perspective, I found that houses in Virginia felt like overgrown wooden sheds compared to my brick and slate terraced house back home, and bot something I'd want to sink my money in. They work differently too in how they are heated, cooled, wired - I could look a house in the uk and have a reasonably good idea of what work it would need and how to go about it. Would have to start from scratch in the US. You may regard that as an adventure to be relished and a positive thing. Too much risk for me and my lifetime savings.

I do get a little frustrated with the idea that rent money is something you'll never get back. It's not meant to - it's money paid in return for a roof over your head, plus not having the long term responsibility of tax, maintenance and repairs and the flexibility to up sticks and leave it all behind. It's perfectly fine for a couple of years - lets you concentrate on the fun side of your move.

Good luck with whatever you decide.
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Old Nov 28th 2015, 11:03 am
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Default Re: Mortgage info

Originally Posted by Pulaski View Post
Go ahead then, fill your boots, there is apparently no downside risk to "investing" in a home in the greater Austin area.

BTW I have one word to strike fear in the heart of the school-district-obsessed home owner investor: "redistricting"
I'll 2nd that. Try living in my area (Raleigh NC) where the school district has reassigned up to 3000 kids each year in the name of social engineering. For us there is no guarantee that the school closest to your home will be the one you are assigned to or that your choice of calendar (traditional vs year round) will be respected. Mark Twain said it best about School Boards.
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Old Nov 28th 2015, 1:03 pm
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Default Re: Mortgage info

Originally Posted by petitefrancaise View Post
You can get a US bank account without a social security number. You can't get any type of credit/loan product until you have the social security number though..
I updated some of the info about banking a couple of months ago based on a conversation with my banker. find it here

It is possible to get a mortgage before arriving here, someone recently did it and they may be along shortly to give you more info. As Pulaski says though, make sure you thoroughly investigate pros and cons beforehand. Not sure where he gets his info about Texas real estate, it is going gangbusters here in Austin and since Houston is also rapidly expanding I would imagine that it's not that different there. Buying is cheap - selling is 6% + fixing up the place to be perfect. Look into house tax as well, there is no state income tax here so state funding comes from house taxes and if you're not prepared then that is a shock.

I'll pm you the details of my wells fargo contact for getting a mortgage using your UK credit history.

Come back with more questions if you need to.

How exciting for you!!
That is a great info.
We want to open the US bank account before arriving to the States.
Can you tell us which bank did you do it with?
I also wonder if getting a mortgage using Irish or Dutch credit history is a possibility?
Thanks
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Old Nov 28th 2015, 1:44 pm
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Default Re: Mortgage info

Originally Posted by tada View Post
.... I also wonder if getting a mortgage using Irish or Dutch credit history is a possibility? ..??.
Non-US credit histories cannot be imported into the US. Full stop.

A few people have reported submitting a printed copy of their non-US credit history with a (n ultimately successful) mortgage application. I would suggest it is far from certain that the non-US credit history, that from a US perspective is an unknown quantity and cannot be independently verified by the mortgage underwriter, made a material difference to the mortgage application. ..... Granted, I am sure it did no harm.

Last edited by Pulaski; Nov 28th 2015 at 1:50 pm.
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Old Nov 28th 2015, 8:58 pm
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Default Re: Mortgage info

Originally Posted by tada View Post
That is a great info.
We want to open the US bank account before arriving to the States.
Can you tell us which bank did you do it with?
I also wonder if getting a mortgage using Irish or Dutch credit history is a possibility?
Thanks
I'm not sure you can open the account before arriving in the USA, the powers that be are very keen on making sure that you are a real person that can be verified and I don't know how keen they will be to do that without seeing you. I will ask my guy next week.

You can open a bank account as soon as you get off the plane though. As I wrote in the wiki, you need ID and proof of your address which doesn't have to be in the US. As soon as the account is opened then you can change the address to a local mailbox - which can be rented.

Wells Fargo have an international team that can evaluate you based on foreign documentation (non-US). We used them and even though all our documentation was in French they went through it without needing translations. It took a bit longer than it would have had we been normal US residents with normal credit history but the final interest rate was the same as being offered to others.

Mind you, we were very new greencard holders at this point too. Someone else on the forum got a mortgage through this team on an L1/2 visa before their relocation though so it is possible.

In terms of whether it's worth renting or buying where you live, I recently saw a formula for working it out. Where I live, rents are high and there aren't many houses available to rent, so you end up living in a less than perfect house and paying out a lot of money to rent it.
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Old Nov 28th 2015, 11:47 pm
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Default Re: Mortgage info

We have looked into this a lot recently, having been here nearly a year and having a dislike of paying someone elses mortgage. We are also in Houston.

With a very low credit rating (580+) you can get an FHA loan for 3.5% deposit. We are on an E2 visa, so no permanency whatsoever. I have also worked very hard on my credit since I got here, and now have a score in excess of 700 (according to the reports pulled by my mortgage broker), so by doing the right things you can quickly get over the 580 required

However, after some thought we decided against it.

Firstly, if we put down 3.5% we would need the house to appreciate significantly for us not to lose money. Selling costs are around 6% so there's 2.5% to make up straight away.

Secondly, if we want to/have to move back then I don't want the hassle of trying to sell quickly, or renting it out.

Thirdly, there are so many houses going up in Houston, even with the oil price falling, I just don't see it as a good use of money whatsoever. Why would anyone buy a house for $300k, when they could design one to their own specification for the same money.

Renting is fairly cheap and you get long term leases.

One of the few things I wouldn't change about our move is renting. It has worked out fine
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Old Nov 29th 2015, 1:01 am
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Default Re: Mortgage info

Originally Posted by Canveydave View Post
We have looked into this a lot recently, having been here nearly a year and having a dislike of paying someone elses mortgage. We are also in Houston.

With a very low credit rating (580+) you can get an FHA loan for 3.5% deposit. We are on an E2 visa, so no permanency whatsoever. I have also worked very hard on my credit since I got here, and now have a score in excess of 700 (according to the reports pulled by my mortgage broker), so by doing the right things you can quickly get over the 580 required

However, after some thought we decided against it.

Firstly, if we put down 3.5% we would need the house to appreciate significantly for us not to lose money. Selling costs are around 6% so there's 2.5% to make up straight away.

Secondly, if we want to/have to move back then I don't want the hassle of trying to sell quickly, or renting it out.

Thirdly, there are so many houses going up in Houston, even with the oil price falling, I just don't see it as a good use of money whatsoever. Why would anyone buy a house for $300k, when they could design one to their own specification for the same money.

Renting is fairly cheap and you get long term leases.

One of the few things I wouldn't change about our move is renting. It has worked out fine
I'm also finding that you need to put a lot of maintenance money in to American houses (much more so that I had to in the UK). The conditions, climate and rate of degradation are very different here and I find every weekend I am down Home Depot picking up bits and pieces for some maintenance work that I'd rather not be doing (and putting off projects I rather would).

Additionally, one thing I had not fully appreciated before shopping around for mortgages here is the requirement to purchase Mortgage Insurance (PMI) where your equity is less than 20%.
So if you're thinking about putting down 3.5% for and FHA you're probably going to be spending a lot of money on PMI that you're not going to see back (much like rent). In an expensive market like San Diego, your PMI could be as much as a rental fee in the mid west... and that's before you've forked out property taxes (which I understand can be quite high in TX).

Finally, the selling fees here - have you seen what you fork over to the realtor?
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Old Nov 29th 2015, 1:13 am
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Default Re: Mortgage info

Originally Posted by username.exe View Post
I'm also finding that you need to put a lot of maintenance money in to American houses (much more so that I had to in the UK). The conditions, climate and rate of degradation are very different here and I find every weekend I am down Home Depot picking up bits and pieces for some maintenance work that I'd rather not be doing (and putting off projects I rather would). .....
This is so true. ..... Here is what I wrote about three months ago, right after the Labor Day weekend:

..... The list of smaller repairs in US homes just seems to be relentless and brutal, and gets expensive and tiresome if you are forever paying plumbers, electricians and handymen to fix things. I often joke that my house isn't just a home, its a hobby. I would find my own joke more amusing had I not spent most of yesterday Sunday dismantling and reassembling a toilet five times while struggling to fix a leak, only to discover that the "universal" gasket I was trying to fit didn't work for this brand of toilet, so off to Lowes to buy the right gasket.

Then today, a bank holiday, I spent fixing a jamming bedroom door that had been badly fitted in the first place, then jammed when the house "settled" (timber frame houses do that ), and replacing a ceiling fan which stopped working. So much for a bank holiday weekend!

Other things I have done this year include: replacing a hood over the cooker with a microwave, replacing a rotted bathroom floor, replacing a leaky kitchen tap, and replumbing the kitchen sink drain which was leaking, replacing door lock that had worked loose so often that the mechanism was bent and couldn't be made tight again. And painting the exterior has been a three year project that is drawing to a close, though realistically I will need to start again as soon as I have finished. I also installed new door in an open doorway because the laundry appliances are just around the corner from the living room, making it difficult to watch TV when the washer is going.

Last edited by Pulaski; Nov 29th 2015 at 1:23 am.
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Old Nov 29th 2015, 1:18 am
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Default Re: Mortgage info

I'm with the folks who recommend renting, at least for the first year.

Lifestyle will be very different, as well as maintenance and utility costs.

Will you know how buggy a area is so that you make use of the outdoor decking? Would you rather end up with a screened in porch? Do you want to have and deal with your own pool and the cost of insurance? Can you really put up with the commute times? Do you understand how well a place is heated and cooled and the running costs? How expensive are the after school programs? How much travel is involved in those programs?

What will you do if the company won't pursue greencards? What will you do if you're laid off after a few months? What will you do if one of you loves the place but the other gets homesick and wants to leave?

You're going to save the most money as a first time buyer, so why blow it buying something that might not work out? A years rent is nothing and moving around town isn't that much hassle in comparison to moving countries.
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