An overarching point to bear in mind is that in many American companies operating in the service sector tend to only see black and white not shades of grey, and they like forms, lots of them – you do need a good mortgage advisor aware of the differences between American and British mortgages to advise you.
1. Do your research – with lots of conflicting information and the inevitable hype – our powder washes whiter – this may be tougher than you think. Be sure that the source is reliable, double check facts and ask your self if it makes sense.
2. Decide on the type of financing you are looking for: Sterling or Dollar, interest-only or capital repayment, long-term or short-term.
3. Start the process early – Get pre-approved for your mortgage before starting your search for a home, in the current market in Florida many property sellers will not take an offer seriously if the potential buyer has not been pre-approved.
4. Should you chose to finance in the USA make sure you obtain a “Good Faith Estimate”. This is a standardized document used to detail all the costs of obtaining your mortgage. This form will cover monthly and one-time costs (disbursements) – Remember, this is an estimate and some unscrupulous mortgage providers can and indeed have been known to mysteriously omit items that you may have to pay later. If you compare estimates make sure to question any big variance in costs immediately.
5. Be aware of time scales – The US home buying system is heavily reliant on time scales. Make sure you provide any required documents in a timely manner to avoid running out of time and possibly being in breach of contract. Breach of contract can cause you to lose your deposit.
6. Whenever possible try to secure a self-certified mortgage. Unlike the UK this type of mortgage does not necessarily carry a higher interest rate than a fully documented mortgage and could save you a lot of time and frustration assembling documents.
7. Open your US bank account in person at the banks local office whenever possible. Since the higher security measures have been implemented post September 11th it can be difficult to open an account unless you are physically present in Florida. Ask your estate agent or mortgage provider to recommend a suitable bank branch.
8. Keep in mind that most “Foreign National” mortgages require a minimum of 20% down payment with some special programs requiring 30% or even 35% down. Although there are many mortgages offered with lower down payments the vast majority either are not available for non American buyers or have some strings attached.
9. Make early enquiries concerning Buildings and Contents insurance (known in Florida as Hazard or Home Owners insurance) for your Florida home. During the Hurricane season (June through November) it can be difficult to put insurance in place if you have not made early arrangements.
10. Decide early on if you will be in Florida for completion. (Called “closing” in Florida; typically takes place around a conference table in a lawyers or title insurance office) This is when you become the official owner of the property. If you will not be present you will need to make everyone aware of this so arrangements can be made for either a “Mail-Away” closing (where all the legal documents are sent to you in the UK) in which case you will need to make an appointment with a notary in the UK who will witness your signatures. Alternatively, you can authorize your US attorney (or other legal representative) to have your “Power of Attorney” and act on your behalf signing the legal documents for you.
About the Author
Stephen offers independent advice to British clients on mortgage programs and trends in Florida. Stephen has advised hundreds of British residents on relocating, investing and buying a home in Florida He can be reached at email@example.com