im in australia and coming to usa.....i just want to know if i can buy a house there with my partner over there and have my name on the paper work?i will be doing an 18 month paid internship!....i just want to protect myself because i will be paying into the homeloan as well........
2006-12-25 11:29:44 · 3 answers · asked by patricia c 2 in Business & Finance ➔ Renting & Real Estate
There is more than one way to protect yourself in this situation:
1) Yes, you may buy a home in the US on a Visa, however, the percentage of the home's value a bank is willing to lend (known as the loan-to-value or LTV) is less than if you were a permanent resident alien or a citizen (some lenders allow up to 75%)
2) Additionally, remember that there are two separate documents to understand when purchasing a home and procuring a mortgage: the deed and the note.
The "deed" (also known as the warranty deed or grant, bargain, sale deed) is a document on which the names of the owners of the home will be listed and recorded as a county document according to the laws in the state you are purchasing.
The "note" is a separate document which details the type of loan you take out for a specific property. If you choose two loans, there will be two; whereas, there can be only 1 deed.
The "deed" shows legal ownership and the "title" shows debt.
In your case, it may be most beneficial for you and your partner to consider putting the mortgage note in their name (if they are a citizen or permanent resident alien) if it is your intention to finance more than 75% of the home's value (depending upon your credit score and other detailed information needed to qualify you for a mortgage). Although your name will not show on the mortgage (not necessarily a bad thing...you won't be responsible for the debt), you and your partner must agree that you will be contributing to a portion of the mortgage, and that he/she will agree to add your name to title (some states use a simple quit claim deed or a warranty deed, on which your partner simply signs over a portion of the ownership of the home, legally) after the loan closes and records.
You two may decide to "hold title" (which means how you legally choose to have the ownership recorded at the county recorder's office) as "joint tenants," where you both will own equal portions of the home and if something happens to the other, all ownership transfers to the remaining owner; or you may choose to hold title as "tenants in common," where you both may own either equal shares or different percentages of the property. Additionally, tenants in common also allows you to will your percentage of the property separately or sell it separately, without the permission of the other title holder.
Although the second option protects you, your partner is actually taking on a great amount of risk by sharing ownership with you, when you actually are not responsible for the mortgage.
These are technicalities that the two of you should discuss in advance before moving forward. I would recommend that you both get prequalified for the loan and decide how much money you can afford to borrow and compare that to what the bank will lend to you, then consider how you want to hold title. You will be able to make the best decision once you know where you stand with the lenders.
Finally, you mentioned that you will be here for 18 months. I am not sure what your motivation is for purchasing a home for this short time. The time for making fast money on quickly appreciating properties is past. The real estate market across the country is encountering a sharp slow-down. Some areas of the country are still "normalizing" after the huge jumps in value 2 -3 years ago. If you purchase a home now, and only intend to hold onto it for 18 months, you may see little return on your investment and even worse - your purchase may lose value.
Not to discourage you, but some lenders may attach a pre-payment penalty to a loan they may find to be a bit riskier than other loans. Pre-payment penalties range from 1 to 5 years and require a borrower to pay 6 months of interest or more (on average) if the borrower chooses to sell or refinance during the specified time frame.
2006-12-25 12:07:43 · answer #1 · answered by Shiba 1 · 1⤊ 0⤋
Shiba said it all - almost.
There's one other thing to look out for. When you go to sell the house eventually, the title company is going to have to hold about 30% of the proceeds until taxes clear.
2006-12-30 17:37:20 · answer #2 · answered by teran_realtor 7 · 0⤊ 0⤋
Relax,have a good time,eat and go to Disneyworld florida,i live in the uk,but that's what i would do,wish i was you
2016-05-23 06:30:38 · answer #3 · answered by Anonymous · 0⤊ 0⤋