Financing your Florida vacation rental home

At the last count there were some 12,000 banks and lending institutions in the United States, all of which have there own "Special Programs" and these change frequently. Therefore it is of little use attempting to quote rates or terms at this point in time, suffice to say that a 20% to 25% deposit is the norm for foreign puchasers and the term can range from 15 to 30 years, regardless of the applicants age. The lending system in America is primarily based upon the borrowers demonstrated ability to repay the mortgage loan from income. Personal assets and net worth are regarded only in that these assets can or should produce income.

Income will primarily be determined from your last two years P60 and a recent pay stub, alternatively if you are a self employed person you should provide copies of your last two tax reports as filed with the Inland Revenue. In the case of a person holding more than 25% share in a Limited Company or Corporation, copies of both your P60 and any additional directors drawings reported to the inland Revenue should be provided to determine your effective income. As a general rule no more than 25% to 28% of your monthly income (Gross before Taxes) should be commited towards paying for your Florida vacation rental home.

The mortgage Application Process will initially require a signed contract for the purchase of a house, a completed loan application form, plus a fee of approximatley $250.00. In order to save time and the inevitable criss-crossing of additional paperwork you should also have available:

1. Proof of income for the last 2 years. (Form P60 and three wage slips would be ideal)

2. A statement on your U.K. Mortgatge showing outstanding balance and monthly payments.

3. Monthly Statements on any credit cards you may have.

4. Copies of any hire purchase, lease payments or other loans you may have.

5. Current and Savings Account Bank Statements, including Building Societies.

6. Copies of any Stocks and Shares you may own.

7. Income Tax returns for two years. Or if self employed copies of accounts.

8. Proof that you will have the cash deposit available for closing. This deposit can also be borrowed providing that it is against equity, for instance a mortgage on an existing property, however you should bear in mind that you will need to show sufficient income to repay this loan along with your new mortgage.

Do not be afraid to show existing loans, in America this is taken as a good sign that you are credit worthy. Remeber when signing a contract to purchase your home builders will accept a holding deposit of $1,000 thus enabling you to send on further funds later.

Easy Qualifying - None Documented Mortgages

The qualification for a none-documented mortgage is very simple. These requirements are:

1. A 30% cash deposit

2. Your Passport

3. A U.S. bank account, which you can open on arrival. It really is that easy.

Should I take out a mortgage abroad or at home?

The U.S. Internal Revenue Service allows full tax relief on mortgage interest, therefore if you intend to rent out your home this income can be used without tax deduction to pay down your loan. A loan taken out in the UK would probably involve making re-payments with monies on which tax has already been paid.

In addition you would be subject to currency fluctuations, remember rental income is paid in U.S. Dollars.

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© Universal Vacations Realty,Inc. 2006.

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