Its research has also found that property prices rose in 50 per cent of US cities in the first quarter of this year, and many now believe that the property market is showing signs of bottoming out as mortgage rates continue to get cheaper and improving employment prospects draw buyers back to the market.
Average rates on 30-year and 15-year fixed deals have been falling to near record-low levels in recent weeks, which is making property more affordable. Rates on a 30-year fixed-rate mortgage averaged 3.66 per cent last week according to Freddie Mac’s weekly survey of conforming rates. This time last year, the rate averaged 4.5 per cent.
Conti continues to get a lot of interest from prospective investors who are thinking of buying a property across the pond. Top of the list for many is Florida, where property prices have fallen dramatically over the last few years, with many homes being sold for less than it cost to build them.
There have been warnings to investors about the dangers of buying repossessed properties at bargain basement prices in locations such as Detroit, which often involve too much risk. Mortgages are not available for such properties and I would definitely advise against a cash purchase in these cases. It’s advisable for investors to stick with the better known and trusted markets such as California, Colorado, Texas, Florida, and Manhattan New York, where you can also find bargains with a lot less risk involved. You’re more likely to qualify for a mortgage in these areas too.
You may have read, however, that strict lending policies are still preventing many borrowers from taking advantage of these investment opportunities. There’s no doubt that the mortgage market has changed significantly over recent years in the USA and that financing the purchase of a property there is not as easy as it used to be, but it’s certainly not impossible, especially if someone has a healthy deposit to put down.
When it comes to mortgage availability, there are, in theory, no restrictions to foreign nationals owning property in the USA and mortgages are available for purchases up to 65 per cent or 70 per cent of the property’s value depending on the state in which the property is located. Most are on a repayment basis, and interest rates and loan terms tend to vary depending on the property type and exact location.
The maximum term of any mortgage is 30 years, the minimum loan amount is $100,000, and total mortgage payments and other financial commitments must not exceed 38% of the buyer’s gross monthly income. Many of the mortgage deals on offer have no redemption penalties.
