How to get a mortgage in the US as a UK foreigner?

Moving to the US from the UK? Whether you’re still in the planning stages or you’ve already relocated across the pond, one of the most critical things on your to-do list will be finding somewhere to live.

If you plan to buy your own property in the United States, you’re likely to need a mortgage.

In this guide, we’ll cover everything you need to know about mortgages for foreigners in the USA. This includes how it works for UK expats, how easy/difficult the process is and what documents you’ll need. We’ll also run through some expat-friendly US banks and lenders to check out.

Also, if you’re looking for ways to save money on currency exchange when sending a down payment or mortgage fees to the US, check out the money services provider Wise. You can send large transfers with Wise for low fees* and great mid-market exchange rates - making it ideal if you’re sending a secure international transfer.

Table of contents

Can you get a mortgage in the US as a non-resident? Getting a mortgage in the US from the UK Mortgage eligibility criteria for UK citizens in the US Is it easy to get a mortgage in the US? Step by step guide on how to apply for an American mortgage as a foreigner Which documents do you need as a non-resident? How long does it take to get a mortgage in the US? Fees and costs for getting a mortgage in the US Application fees Origination fees Appraisal fees Other fees and costs US banks or lenders offering mortgages to foreigners Mortgage rates in the US Can you get a UK mortgage to buy property in the US? Do banks offer Buy-to-Let (BTL) mortgages in the US? Remortgaging in the US Types of mortgages in the US Fixed-rate mortgages Adjustable rate mortgages (ARMs) Government-backed mortgages Jumbo mortgages Final tips for getting a mortgage in the US as a non-resident Send the down payment and mortgage fees to the US with Wise and save money

Can you get a mortgage in the US as a non-resident?

It is possible to get a mortgage in the US if you don’t live there, but it can be both difficult and complicated.

While you don’t need permanent residency to buy or sell property there, US lenders prefer to lend to US citizens and permanent legal residents. This is primarily because it’s much easier to look at the applicant’s credit history, creditworthiness and ability to make repayments.¹

So if you haven’t yet moved to the US, you may need to shop around quite extensively for a lender who’ll accept your application.

In most cases, you’ll also find that the requirements for application are more rigorous than for US nationals and residents. You might need more paperwork, and have to put up a bigger deposit (meaning you can’t borrow as much). And the mortgage you’re eventually offered may have higher interest rates.¹

Getting a mortgage in the US from the UK

It’s common for UK nationals to buy property in the US, with a mortgage from a US lender.

One crucial thing you’re likely to need though is a Green Card, as evidence of permanent residence. If you have this, you basically have all the same mortgage options as a US national. You may also be able to apply for a US mortgage as a Brit if you have a temporary residence permit.²

A number of US banks offer specialist mortgages aimed at international buyers, including people from the UK. For example, HSBC and Chase, both of which are banks operating in the US and the UK.

There are also Federal Housing Administration (FHA) mortgages. These are available for Green Card holders who may struggle to get a loan from a private lender, and usually only require a very small deposit.²

Mortgage eligibility criteria for UK citizens in the US

Eligibility criteria for mortgages will vary between lenders, and between states too.

But generally speaking, you’ll need to meet the following requirements as a UK citizen:²

• Have a debt-to-income ratio of below about 29%, although you may still be accepted if it’s higher - if the rest of your application is strong.
• Be between 18 and 75 years old. If you’re older than this, you may need to shop around for a lender that offers loans for over 75s.
• Have continuous full-time employment. If you’re self-employed, you might need to look for a specialist lender as not all mainstream lenders will approve your application due to concerns over fluctuating income.
• Creditworthiness. Ideally, you’ll have a strong US credit rating with a history dating back at least 2 years, but some lenders will use your UK credit history to assess this.

Is it easy to get a mortgage in the US?

If you meet the lender’s criteria, getting a mortgage in the US can be relatively straightforward. Be prepared for plenty of paperwork though, along with detailed questions about your income and spending habits.

However, there are some challenges that can make it more difficult. For example, you might not be able to get a mortgage if you have a poor credit history, a high debt-to-income ratio or gaps in your employment history. Self-employed people sometimes struggle to secure a mortgage.

According to research in 2023, US lenders have significantly tightened their lending standards recently. This could make it much harder to secure your mortgage.³

And for UK and other foreign nationals, there may be other obstacles to overcome. You may not have enough of a credit history in the US, or meet other requirements such as minimum salary or deposit.

You might need to show more documentation, or be asked for extra information - which can slow down the process.

Step by step guide on how to apply for an American mortgage as a foreigner

To give you an idea of what to expect, here’s a step-by-step look at the process of applying for a US mortgage as a UK national:

1. Decide if you want to use a broker to explore your options for a US mortgage. Alternatively, choose a bank or other lender with a mortgage that suits your needs.
2. Get your documents ready (we’ll cover exactly what you need next).
3. Get a Mortgage Agreement in Principle (AIP). This essentially means the lender is willing to lend to you ‘in principle’, subject to approval and final checks of the property you intend to buy. You may need to show this to real estate agents in order to arrange property viewings or submit offers.
4. Find a property within your budget and agree on a purchase price with the seller.
5. Apply for your mortgage formally. This involves submitting a full application along with your supporting documents. At this stage, it may also be useful to open a US bank account, or an international account.
6. The lender will verify your information and reach a decision on your application. They may need to carry out an appraisal of the property’s value, and there may be a fee for this.
7. If your application is successful, you’ll receive a formal mortgage commitment. Read the terms and conditions carefully before accepting.
8. Sign the mortgage documents and continue the final legal steps to purchase your home.

Once this is done, you can get on with buying your property in the US.

💡 Read more: Taking cash in or out of the UK: What are the rules?

Which documents do you need as a non-resident?

The exact documents you’ll need to apply for a US mortgage loan as a non-resident will vary between lenders.

But here’s an idea of what you’re likely to need:⁴

• Proof of identity - such as your passport
• Proof of income/earnings - such as pay slips, tax returns, and employment contracts. Self-employed people may need to provide additional financial records, such as accounts or tax returns dating back several years.
• Proof of employment
• Proof of assets
• Bank account statements for the last few months, showing that you have enough money for your down payment.
• US credit history records (if any) or your UK credit report
• Proof of deposit

How long does it take to get a mortgage in the US?

On average, it takes anywhere between 30 to 60 days to get your formal mortgage offer after applying, with 49 days being about the average.⁵

Fees and costs for getting a mortgage in the US

Applying for a US mortgage comes with a few different fees, generally grouped together under the term ‘lender fees’.

They include application fees, origination fees and appraisal fees. Overall, they amount to around 1-2% of the amount you’re borrowing.⁶

Application fees

This is the fee associated with applying for or completing your mortgage. It varies by lender, but can cost as much as $500.⁷ Some lenders don’t charge a fee, while others waive it if you already have products or accounts with them.

Origination fees

The origination fee is an upfront fee charged by US lenders to cover the costs of processing your application and issuing a loan. This is a little confusing, as some lenders also charge an application fee - which sounds like the same thing.

But specifically, the origination fee covers things like verifying your information and identity, and reviewing your application.

In some cases, the application fee will be bundled in with the origination fee.

It will usually be around 0.5% to 1% of the total loan amount.⁷

Appraisal fees

If the mortgage company needs to carry out a valuation of the property, they may charge an appraisal fee. It’s usually between $313 to $422.⁷

Other fees and costs

You may also encounter some of these other charges when applying for a US mortgage loan:⁷

• Credit report fee - usually around $35, this fee is charged by lenders for pulling your credit report and checking your creditworthiness.
• Recording fees - this is a fee charged by the local government for transferring and recording the property’s mortgage deed. It can range from $20 to $250.
• Transfer fees - if you need to make payments between countries to pay the down payment or the fees above, you may incur fees.

US banks or lenders offering mortgages to foreigners

All major banks and building societies in the US offer mortgage products, but they might not all have a service suitable for expats, or non-residents.

Which lenders you can choose from as a UK expat will mainly depend on whether or not you have a Green Card. If you’re a non-resident, you may struggle to find a lender. Ultimately, the decision about who is eligible for a mortgage or home loan is made by the lender.

If you live in the US or are visiting, you might want to pop into the local branches of banks which you’re interested in, for a chat about which products might suit you. Alternatively, you can enlist a broker to help.

The following banks could be your best bet for getting a mortgage in the US as a UK expat, as they have a presence in both countries:

• HSBC Bank USA – HSBC is a global banking brand with a presence in both the UK and the US. It offers a range of dedicated mortgage solutions for non-US citizens, including those looking to invest in property.
• Chase – The major US bank Chase has an International Relocation Mortgage program available for foreign applicants. It’s not suitable for non-US residents though, as a US social security number, address and legal residency are all key requirements.⁸

Also, if you already bank with Chase in the UK, it could be worth getting in touch to see if they can help you secure a mortgage in the US.

💡 Read more: How to transfer large sums of money between bank accounts?

Mortgage rates in the US

Here’s a quick look at average mortgage interest rates in the US:⁹

Mortgage type	Interest rate APR (as of Sep 2024)
10 year fixed rate	5.83%
20 year fixed rate	6.26%
30 year fixed rate	6.48%
5/1 adjustable rate mortgage ARM (5 year term, rates change 1 time per year)	6.97%
10/1 adjustable rate mortgage ARM (10 year term, rates change 1 time per year)	7.23%

There are a couple of things to bear in mind though. Firstly, these average rates are accurate at the time of writing (05/09/24) but they change regularly. You’ll need to check the updated rates when you’re ready to apply for your mortgage.

The rate you’re offered will also depend on your circumstances and eligibility, the amount you’re borrowing and how much of a deposit you have. Non-residents can usually expect less preferential terms than residents and US citizens, which could mean higher interest rates.

Can you get a UK mortgage to buy property in the US?

It may be possible to get a mortgage in the UK to finance your property purchase over in the US. But not all UK banks and lenders offer what are often known as ‘overseas mortgages’.

Your best bet would be to try an international bank which operates in both countries, such as HSBC or Chase.

You could also look at remortgaging an existing property you own in the UK, borrowing more to raise funds for the US purchase. Crucially, you should only do this if you can afford the repayments. Seeking financial advice could be beneficial.

Do banks offer Buy-to-Let (BTL) mortgages in the US?

Yes, a number of banks and lenders offer Buy-to-Let mortgages in the US, although over there it’s known as 'Buy-to-Rent'.

These are mortgages designed specifically for buying US property as an investment, which you intend to rent out to tenants.

In the US, buy-to-rent mortgages tend to have higher interest rates, and you’ll need a deposit of at least 30%. You’ll also have to convince the lender that you can afford the repayments with your rental income, which can sometimes be difficult to do.²

Remortgaging in the US

It’s also possible to refinance a mortgage in the US, which is more commonly known as ‘remortgaging’ here in the UK.

You may want to do this to unlock equity from your home, lower your payments or shorten the term of your loan.

Refinancing can also help you borrow more money for a specific purpose, such as to buy another property or start a business. You’ll just need to make sure you can afford the repayments and aren’t overstretching yourself.

Types of mortgages in the US

There are a few different mortgage types available in the US, and it’s important to choose the right one for your circumstances.

The main types to know about are - fixed-rate mortgages, adjustable rate mortgages (ARMs), government-backed mortgages and jumbo mortgages.

Fixed-rate mortgages

A fixed-rate mortgage has a fixed interest rate for a set period, which in the US is usually 15 or 30 years.

Adjustable rate mortgages (ARMs)

ARMs have interest rates which change over time. You’ll often start off with a low introductory rate, then this will change (down as well as up) at set intervals throughout the term of the loan. You can tell the loan term and the frequency of interest rate changes by the name of the product. For example, a 5/1 ARM has a five year term and the rate will change once a year.

Government-backed mortgages

If you are struggling to get finance elsewhere, possibly because you have a low credit score, you may be able to get a government-backed loan. These are provided by the Federal Housing Administration (FHA) and only require a small deposit, although you may need to pay mortgage insurance premiums.

Jumbo mortgages

As the name would suggest, this type of mortgage loan is designed for large purchases where you need to borrow more than about $750,000. Jumbo mortgage products usually have higher credit score and down payment requirements.

💡 Read more: The best UK banks for sending money abroad

Final tips for getting a mortgage in the US as a non-resident

To stand the best chance of getting accepted for a US mortgage as a non-resident, bear these tips in mind:

• Try to build up a credit file or some form of financial footprint in the US, such as opening a US bank account. This may mean you need to wait until you’ve moved to the US.
• Ensure you have a large enough deposit
• Get tailored advice about suitable mortgage products for non-residents and foreign applicants
• Make sure you have all your documentation in order, especially relating to income, employment and savings. Ensure it’s translated into English if in another language.

Send the down payment and mortgage fees to the US with Wise and save money

If you’re sending your deposit and mortgage fees to the US from the UK, you may incur hefty transfer and exchange fees when converting your British pounds to the US dollars (USD). This is where Wise and the Wise account can help you save money.

Open a Wise account online and you can start managing your money in 40+ currencies (including GBP and USD). It’s not a bank account but offers many similar features.

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Sources used:

1. ID Mortgage Broker - How to Buy a House in the USA for non-US Residents
2. Online Mortgage Advisor - Mortgages In The USA
3. CNN Business - Here’s why it’s gotten so much harder to get a loan in the US
4. America Mortgages - The Requirements and Process for Getting a U.S. Mortgage Loan
5. American Home Shield - How Long Does It Take to Get a Mortgage Approved?
6. CNBC - What are mortgage lender fees?
7. Experian - Everything you need to know about mortgage fees
8. Chase - International Relocation Mortgage Program
9. Bankrate - Compare 30-year mortgage rates today

Sources last checked on date: 05-Sep-2024