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Posts Tagged: Foreign National Loans

Why Alternative Mortgages Are a Smart Choice

Why Alternative Mortgages Are a Smart Choice

Traditionally, mortgages in the U.S. are financed by banks that also operate other lines of business, like offering deposit accounts and insurance products. But today, the American homebuyer is anything but traditional, and they are looking to lenders other than banks to fill the gap. Fortunately, financial institutions continue to create innovative mortgages that fit the diverse needs of borrowers, rather than forcing consumers to conform to rigid standards. The end result is more people with the financing to afford the home they need, rather than being shut out of homeownership entirely.

Foreign National Loans Are Making a Comeback

The U.S. is experiencing a boom in foreign national loans.

More and more overseas buyers are shelling out cash for real estate in the U.S. In the past year, 50 percent of foreign homebuyers paid cash for their investments, according to the National Association of Realtors. But a strong market value of the U.S. dollar and rising home prices have blocked some buyers from purchasing homes outright, which means they need to look for other financing options, The Real Deal explained. Strong interest in the American real estate market from foreign buyers has been a large contributor to inflated home prices, National Mortgage News reported.

"Applicants must make as much as a 30 percent down payment."

Many foreign buyers flock to nonconforming loans - which are different from conventional loans and jumbo mortgages - because they allow them to buy more expensive homes than they could through traditional means. But this comes at a price. Applicants must make as much as a 30 percent down payment on loans up to $1 million, and even more for bigger loans, The Wall Street Journal reported.

Urban Population Swells 12 Percent From 2000

Four out of every five Americans now live in urban areas, according to the 2010 U.S. census, which represents a 12.1 percent increase from the figure observed 10 years ago.

Although New York, Los Angeles and Chicago metropolitan areas have the highest populations, California contains seven of the 10 most densely populated urban centers. Los Angeles boasts about 7,000 people per square mile, which is the highest in the country, while the average population density in urban areas is 2,534 people per square mile.

Foreign National Loans Taking Up Greater Share Of U.S. Sales

In the last two years, buyers with foreign national loans have purchased $82 billion worth of U.S. properties, compared with an estimated $66 billion in sales the previous year. According to the National Association of Realtors, even though this figure has increased, it still pales in comparison to the total value of the domestic housing market - $1.07 trillion.

Just more than half of all foreign buyers come from Canada, China, India, Mexico and Britain, respectively. Canadians alone account for about 25 percent of all international sales.

Foreclosure Backlog Continues To Find Relief

In recent months, many foreclosures have stalled midway through the process due to bureaucratic barriers and the sheer volume of affected properties. Many experts anticipate a rise in foreclosures in the coming months, which could harm individual homeowners while providing relief to the overall housing market.

RealtyTrac published a report this week that found 21 states increased their foreclosure activity in February over figures at the same point last year. In total, foreclosure filings occurred on 206,900 properties last month, which represents 2 percent decrease from January.