The states is clearly still popular with British buyers in search of the “American dream”, with a recent study* revealing that more UK citizens moved to the US than any other nation in 2013.
It is easy to see why so many people are drawn across the Atlantic. Not only do we speak the same language, but there are also no big cultural differences, meaning Brits can easily adapt their lifestyle. There are also regular flights running to and from the UK, making it an accessible destination all year round.
The US property market has noticeably suffered in recent years, however 2013 was a good year for the market and there was a rising interest in US property. A number of “bargains” were snapped up and a high number of repossessed properties were sold, leaving the potential for 2014 to be very promising.
There are a diverse choice of places to live in America and range between the bustling city of New York, to the dry and warm deserts of Nevada. Florida still remains the most popular destination for British buyers, Orlando in particular, due to its year round sunshine and outdoor way of living. Properties in Orlando also have great rental potential given their proximity to Walt Disney World Resort and other famous attractions.
New York and California are also favoured amongst buyers who want to live and work abroad, but property prices can be steep in the city centres. If you do not mind being on the outskirts of the city, like in Brooklyn, New York, or Santa Monica, California, then you will find property prices to be considerable cheaper.
Unlike many other countries, there is normally no age cap on a mortgage in the US and the maximum mortgage term is 30 years. Mortgages in the US are also different in the sense that they are underwritten on any taxable income and assets at the time of application. This means that if the applicant can currently afford the repayments, they could be granted a mortgage for up to a 30 year term.
Lending is currently available with a maximum of 75% loan to value (maximum loan size $1.0 million) for the purchase of a second home in the States of Florida, Alabama, Texas, New Mexico, Colorado, California and Arizona. The current interest rates are starting in the region of 5.25% for a five year fixed rate or around 6.25% for a thirty year fixed.
A loan to value of 70% can be offered in all states, with the maximum loan size normally being $2.0 million and interest rates starting at 4.00% fixed for 15 years (15 year term) and at 4.75% if fixed for 30 years. The loan to value may be reduced down to 50% if the property is purchased purely for investment purposes (ie: Buy-to-let), but the lending terms will be much higher.
Please note all mortgages are subject to a client’s financial status and valuation and all will have their own separate lending conditions and setting-up costs.
*2013 International Migtation Study from UniGroup Relocation.
This article was first published on Prime Location here: http://blog.primelocation.com/2014/03/11/buying-overseas-in-the-us-where-prices-are-stabilising/