Mortgage for L1 Visa holder
 

Hi,

We moved here (San Francisco) a week ago. We have found a place to rent but it is very expensive and would rather pay that on a mortgage.

The lady in Wells Fargo said i would need 50% downpayment. I have read that there are loans that require far less (FHA?).

What are my mortgage options if i want to buy a place and i have a SSN, make about 200K (average for SF i suspect) and have previously been living in Singapore (i am British) until now?

Re: Mortgage for L1 Visa holder
 

This topic has cropped up several times recently on these forums, the received wisdom of the board is that, generally, buying a property is best postponed until you have your LPR/green card in hand.

I also understand that San Fransisco is a bit of a hot-spot for property, but you may struggle to get a mortgage with a respectable interest rate until you have established a decent credit rating.

Finally, please reconsider the British "renting is dead money" mindset - the US property market has different break-even points and you may wish to use the following tool to work out whether it is financially worth your while: Rent or Buy

Here are some recent threads on the topic - the search function will probably yield more:

http://britishexpats.com/forum/usa-5...igrant-897843/
http://britishexpats.com/forum/usa-5...g-wary-895734/
http://britishexpats.com/forum/trail...rtgage-897710/

Re: Mortgage for L1 Visa holder
 

Petitefrancaise has experience of dealing with Wells Fargo's new immigrant/ expat mortgage unit and you certainly don't need to put 50% down.

There is a real risk to buying a home when you're on a temporary visa, and for several reasons buying a home in the US isn't as obviously a good financial decision as it is in the UK - the transaction costs are much higher (around 10% of the sale value for a round-trip buy-sell), and the cost of repairs and maintenance are much higher - roofs and heating/AC systems often only last 15-20 years, and can cost $15,000 each. Then there are numerous smaller repairs and maintenance tasks - US homes just seem to require continuous expenditure to keep them running properly and looking good. :(

Re: Mortgage for L1 Visa holder
 

Not sure if it is the same in San Fran but in NJ the rent includes the property taxes which are very high here and form a significant part of the rent.

Re: Mortgage for L1 Visa holder
 

This is a good online buy vs rent calculator.
Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com

Generally though if rents are high, property prices are too if you are comparing similar areas.

I do have a Wells Fargo contact, which I will give you if you send me a pm. I would not rely on the person in the bank. Usually all they can do is fill in the online application for you as if you were a normal US citizen with a credit history, at best they will refer you to HQ.

What WF will do is ask for copious amounts of financial paperwork from the UK going back 1 or maybe 2 years. Bank statements, mortgage payments, tax documents.

As for a deposit, be prepared for a fairly hefty one (50% is absurd), the bigger the deposit then the more likely you are to get the mortgage at a decent rate. Anecdotally here on BE 20-30% seems to do the trick. If you have a green card application then better still.

However, buying whilst on a temporary visa is not advisable, I think most of us here have known people who had their employment here in the USA terminated with almost no notice and given at best 2 weeks to leave the country.

Re: Mortgage for L1 Visa holder
 

You shouldn't need to put 50% down, but if the bank refuses to lend to you then that's their choice.

That said I wouldn't recommend buying property without a green card/citizenship.

The front of mortgage payments is loaded with interest. Only after a while do you actually start to pay down the house (principal).

As such if you have to leave and sell you will probably end up in the red.

Re: Mortgage for L1 Visa holder
 

That's not literally true - you pay some of the principal even with your very first mortgage payment, but, granted it isn't very much on a 30 year mortgage. I bought my first home in the US on a 15 year mortgage and more than 50% of the seventh monthly payment was applied to the principal, and obviously it only increased each month from there on out. :nod:

Re: Mortgage for L1 Visa holder
 

its been a while now - but when we got our first mortgage here on a visa - we had to jump through a billion extra hoops. we didnt put down more than 5%.

Re: Mortgage for L1 Visa holder
 

You are aware of how red hot the property market is in SF? We just left and a friend from there bought their house in the Inner Sunset for $650,000 in 2013. They sold it 2 weeks ago for $1.8m after listing it for $1.2m. There was a bidding war, and they sat on their hands for 3 days while cash buyers threw more and more cash at them - with the winner buying them a cruise in the fall to "look forward to".

Someone fresh off the boat looking for a mortgage is just not going to be able to compete. Most San Franciscans can't and they have a credit history. You are an unknown quality to the bank, and they are fully within their rights to ask 50% down.

Re: Mortgage for L1 Visa holder
 

From my perspective, I just can't get past that concept though. I absolutely hated renting, and as you get older you want far more control of your home (like the ability to make changes as required). You are also able to live in a lovely home rather than a cramped apartment which you share with other people (something I hated).

I used that NYT calculator and it reckons we'd have been better off renting for 6 years, but that just doesn't align with what I've seen. We put 20% down on our home, and our home has already gone up 15% in value (over 3 years) according to Zillow.

Whilst we were paying $2.1k pcm on rent, we now pay $1.8k on mortgage with property taxes of ~8k a year (that's the real killer imo). Plus, we doublepay our mortgage every month (I manually pay $1.8k solely towards the principal of our house) which has allowed us to reduce our outstanding mortgage by over $50k in 3 years.

How possibly can renting be better in those circumstances?!

Re: Mortgage for L1 Visa holder
 

The OP is in San Francisco though, Yes rent is way too high there, but home prices are ridiculous. I mean he could try to see what he can buy, but 200K by itself, without a good amount of savings, doesn't seem to be enough there.
Also, obviously one can live in an apartment that is not cramped and without a roommate. Apartment living does not have to be cramped or shared, so not sure why that's the comparison to buying one's home. People also do buy apartments that appreciate.

Re: Mortgage for L1 Visa holder
 

Because the original statement made was that we should look past the British mindset that renting is dead money.

I've offered my opinion on that, as I believe if you're staying anywhere for >= 5 years, renting is literally throwing money away.

Re: Mortgage for L1 Visa holder
 

It can be - but when 2 BR houses in the city are going for $1.5m (meaning you'd need 300k as a downpayment to avoid PMI) paying $3K a month in rent doesn't seem that bad

Not too many people arrive in the US with 300K+ in their backpocket to slap down as a payment - especially if you're going to get a crappy interest rate for not having a good credit history.

Then of course, there is the argument..."then move" - but if OP's job is in SV or SF proper, the most affordable property is in Pleasanton or Dublin/Tracy area - which is a monster 2 hour commute each way at rush hour.

I'd rather "throw" money away renting close to work than deal with that.

Re: Mortgage for L1 Visa holder
 

Yes, and that is a huge problem in SF. Even those in the tech industry there can't afford half the time to buy property. I remember reading how Tim Cook (when an Apple exec) was complaining about how expensive it was to buy a property - that was in the early 00's!

Re: Mortgage for L1 Visa holder
 

Well Tim Cook has a pretty modest 2BR in PA. I know that the Apple Store workers in PA (5 minutes walk from his house) live in terror of his weekly walk in to see how things are going :lol: