Financing a Home in the United States for the First Time
SIRVA Mortgage, Inc. makes finding the right loan simple with mortgage professionals experienced in serving the special needs of assignees.
As an affiliate of SIRVA, your relocation services provider, we’re experts in relocation mortgage financing and we will work with you and your SIRVA Global Assignment Consultant to design a loan that works with your company’s relocation policy.
The following guide will take you through the U.S. home financing process, from determining the best financing option and completing a loan application, to closing on your new home. If you have additional questions, please contact your SIRVA Mortgage Consultant at anytime.
Process and Timeline Overview
Loan Application and Pre-Approval
Either at the point or prior to arrival in the U.S. the Mortgage Consultant will discuss with you the mortgage process, relocation benefits, products available, loan approval requirements, and expected timeframes for buyers with and without established U.S credit. An initial mortgage application will be completed by phone. You will then receive a pre-approval package via e-mail with a checklist of items needed to be submitted for review for verified pre-approval. You will be encouraged to return your documentation as quickly as possible so that your loan pre-approval can be expedited. Documentation such as bank statements and pay stubs are valid for 90 days from the date of your initial application. A longer house hunting timeframe may require certain documents to be updated.
Obtaining an International Credit Report
- In order to be approved for a mortgage, you must have established US Credit and have at least two credit scores. If you do not, your Mortgage Consultant will work with you to begin the steps of building an International Credit Report. The purpose of the international credit report is to provide SIRVA Mortgage with your credit history. To expedite the process, you will be asked to complete a Credit Checklist in a timely fashion and return to SIRVA Mortgage Inc. for processing.
- SIRVA Mortgage will need to verify at least three lines of credit with a minimum 12 month history. Depending on program type, a housing history (rent or mortgage), commercial credit cards, installment debts, or regular utility payments from the country of origin may be acceptable as credit references.
- In order to verify the trade lines, conference calls are required with the credit services company, the assignee and his or her creditors.
- If neither assignees have established US credit, then a homebuyer education class must be completed prior to the closing on a new home. SIRVA Mortgage will provide information on how to arrange for this class.
After your loan application, you can begin to gather and upload income and asset documentation to the SIRVA Mortgage Document Center based on a checklist of items supplied by the Mortgage Consultant. The documentation supplied (typically a current pay stub, year end statement and bank statements) is reviewed by underwriting and a verified pre-approval letter is issued. A verified preapproval letter of assets and income can be sent even prior to the International Credit Report being returned.
The pre-approval process should be completed prior to home finding. Please note, many lenders issue preapproval letters without actually verifying your income and asset information. SIRVA Mortgage can also issue an unverified preapproval letter. It is important to understand, however, that a verified preapproval letter will not only offer you the assurances that your documentation is sufficient for approval, but it also presents a better negotiating tool when making an offer on a home.
You will work with a local home finding real estate agent supplied by the Global Account Coordinator at SIRVA Relocation. They will locate a property you want to purchase and then make an offer on the home. The time allotted on the purchase contract between offer acceptance and closing should allow for the following:
- Allow you enough time to arrive in the U.S.
- Start working in your new position and earn 30 days or more in pay in the U.S.
- Obtain a U.S. social security number
- Supply a valid U.S work visa
- Complete a homebuyer class
- Meet the standard underwriting requirements of the SIRVA underwriter
Securing an Interest Rate
Once a purchase agreement has been obtained for a new home you will contact your Loan Consultant and lock in your interest rate with SIRVA Mortgage. This will commit you to SIRVA Mortgage, the interest rate, product, and your selected terms. The information needed by the Mortgage Consultant to lock in the rate includes:
- The new property address
- Closing date
- Purchase price
- Contact information for the your realtor
An Initial Loan Disclosure package is created and sent to you within three (3) business days of securing your rate.
The lock package that is sent out after securing an interest rate will contain updated conditions that are required to obtain formal loan approval. Once the required documentation has been received and the property appraisal has been completed, the loan file is submitted for underwriting and final loan approval. Typical documentation that will be required for loan approval includes:
- Paystub from the new location
- Year-end earnings statement for the last two years
- 60 days of asset statements – with supporting documentation to support any non-payroll deposits that exceed 50% of your total monthly base pay
- Any funds withdrawn from overseas accounts and deposited into a US account will also need supporting documentation as to their source
Some of the tasks also completed during this phase of the process include:
- Securing the International Credit Report (loan cannot be formally approved without this)
- Ordering an appraisal on the new home
- Obtaining Power of Attorney if a co-assignee will not attend the closing
- Supplying information on the company providing homeowners insurance
- Checking for new debt
- Confirming assets available for closing
The transaction settlement will be conducted with a closing agent (typically a title company or attorney). Your mortgage loan closer will confirm the appointment with your closing agent. In addition, your mortgage loan closer will communicate the dollar amount of the funds you will need to bring to closing, the address and phone number of your closing agent, and any other documents you will need to provide at time of closing.
The title company or attorney will need to prepare a Power Of Attorney (POA) for anyone who will not be able to attend the closing. If this person is outside the U.S., the POA will need to be notarized at a U.S. Embassy or Consulate. NO EXCEPTIONS.
Funds are typically wired to closing. The title company or attorney will contact you regarding wire instructions.
Glossary of Mortgage Terms
The determination of property value based on recent sales information of similar properties.
Someone who borrows funds, in the form of a loan, and has the commitment of repaying it in full, with interest.
Certified Bank Check
A check guaranteed by a bank to be covered by sufficient funds on deposit.
Also referred to as the closing statement or the settlement statement, this is the document that provides line by line detail of the financial details related to a specific real estate transaction such as the fees paid by the seller and the buyer for a purchase transaction or the fees paid by the borrower for refinances. The closing statement must be received by the Borrower at least 7 business days prior to closing.
An item or document borrower must provide to meet underwriting loan requirements.
A mortgage in which the monthly principal and interest payments remain the same throughout the life of the loan. The most common mortgage terms are 30 and 15 years. With a 30-year fixed-rate mortgage your monthly payments are lower than they would be on a 15 year fixed rate, but the 15-year loan allows you to repay your loan twice as fast and save more than half the total interest costs.
A written estimate of the closing costs the borrower will have to pay at closing. Under the Real Estate Settlement Procedures Act (RESPA), the lender is required to provide this disclosure to the borrower within three days of receiving a loan application.
Credit verified in country of origin.
The loan closer confirms the closing agent and appointment time and works with the title company to gather the final figures needed for closing.
The loan consultant completes the application and pre-approval process with the borrower, helps the borrower find the loan program that best meets their needs, and follows up with the borrower until a property is found and an interest rate is locked.
The loan processor orders the appraisal and follows up with the borrower until final loan commitment is completed and mailed.
Lock (Securing an Interest Rate)
The act of committing to a mortgage rate, expressed in days, during which the lender will guarantee a rate. A borrower will take this action sometime between the application and the closing date. This can be done during the initial loan application process.
Fees that are collected by the lender in exchange for a lower interest rate. Commonly called discount points, each point is equal to 1% of the loan amount. For our comparison purposes, a discount point is considered to be a lender fee. To determine if it is wise to pay
discount points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate.
Power of Attorney (POA)
A written document authorizing a person to act on the behalf of another person. That person does not have to be an attorney.
A contract stating the terms of a purchase.
Written evidence that proves the right of ownership of a specific piece of property.