How to Get US Mortgage: Guide for UK Citizens

Are you a UK citizen interested in buying property in the US? Don’t worry, you’re not alone. Between 2010 and 2021, more than 125,000 UK citizens bought US property in various parts of the country with the most popular places for UK real estate buyers being Florida, Virginia, New Jersey, and Texas. 

Now, you might ask yourself — how did those UK citizens finance their US properties? Did they get a US mortgage loan? Is it even possible to get a US Mortgage for UK Citizens? If you want to know the answers, all you have to do is keep reading. 

Can a UK Citizen Get a Mortgage in the USA?

Yes, UK citizens can easily get a US mortgage to buy property in the States. And the best part is that UK nationals can get a mortgage loan without having a US credit score, history, or Green Card. 

According to the statistics about foreign investment in US real estate, buyers from the UK spent around 1,5 billion dollars on US real estate between March of 2022 and April of 2023. A big percentage of those buyers choose to finance their properties through various types of mortgage loans for nonresidents. And what are the most popular US Mortgages for UK Citizens? We’ll tell you all about that in a bit, but first, let’s talk about document requirements and some of the differences between UK and US mortgage loans. 

How to Get US Mortgage for UK Citizens: 3 Main Steps to Consider

Getting a US mortgage from the UK is not a straightforward process, and because of it, it’s impossible to create a step-by-step guide that will work for everybody. That’s why we’ll focus on the main steps to help you get a clearer picture of what to expect:

1. Estimate Your Budget

First things first, before you even start looking for US mortgages, you should try to figure out how much money and other financial assets you have at your disposal. The questions you should be asking yourself are:

• What is my current cash flow, or how much money do I have to cover the downpayment?
• How much money do I make each month? Is that sum enough to cover my living expenses and the loan payments?
• Do I have any financial assets (e.g., real estate properties, business ventures, etc.) that can help qualify me for a US mortgage? 

2. Prepare Documents

The documents you’ll need will depend on the type of loan you’re trying to get. Your US residency status and the type of US visa you hold (if you have one, that is) can also play a role in the type of documentation you need to prepare. They won’t affect your eligibility to get a US loan (i.e., you can still get a loan if you don’t have any US documents), but will affect the type of paperwork you should put together before applying for a loan. 

The documentation you’ll most likely need to prepare to get a US mortgage from the UK includes the following:

• Proof of Income(UK income is allowed) — documents that show your income (e.g., payslips, tax returns, business financial statements, etc.)
• Proof of Assets — documents that prove your financial stability, including any assets you own(bank statements, investment accounts, etc.)
• UK Credit Report—some US lenders will consider your UK credit report; if you have one, it’s best to prepare it. 
• Proof of Identification — UK passport or US visa or residency status (permanent or temporary resident)

3. Find and Apply for a Loan

Finding and applying for a loan is probably one of the most important steps in getting a US mortgage for UK citizens. There are two distinct ways to do this:

• Do it by yourself — The DIY method is not always a bad idea if you know what you’re doing and where to look for US mortgages for UK citizens. But if you don’t, you’ll just end up wasting your time and money for nothing. 
• Contact a mortgage broker — The job of mortgage brokers is to find and provide clients with customized loan deals that suit their needs. They will help you find a deal, ensure the paperwork is done correctly, and that everything fits your budget. Basically, they will do all the grunt work for you. 

The way you choose to go about this will ultimately depend on your experience with US mortgages. If it’s great, you might be able to go at it alone. But if it’s not, you should definitely contact a mortgage broker to help you find and apply for a loan. Many of them offer free consultations, so our advice would be to get in touch with one, if for nothing less than just to hear what they have to say.  

Book a free call with an NRI mortgage expert to learn more about our services and how we can help you get the best US mortgage for UK citizens. 

Three Main Difference Between US and UK Mortgage Loans

The US and UK have different but highly developed financial systems. These differences also include how mortgage loans are handled in these respective countries:

Interest Rates 

In the US, interest rates will stay the same for the entire duration of the loan, unless you choose a specific type of mortgage with adjustable rates (i.e., Adjustable-Rate Mortgages). 

On the other hand, in the UK, most loans have variable interest rates influenced by various market conditions. The interest rate can be fixed for a specific period (e.g., a couple of years) but not for the entire loan duration. 

Loan Duration 

The duration of mortgage loans in the US is usually 15, 20, or 30 years. Longer loan terms mean your monthly payments will be lower, but you’ll pay more money on interest. In the UK, mortgage loan terms are typically 25 or 30 years.

Taxes 

In the US, you can deduct loan interest from your taxable income more easily than in the UK. In the United Kingdom, only landlords have the right to tax deductions on interest and only under specific conditions. 

US Mortgage for UK Citizens: Most Popular Loan Types

There are many different loan types, and which one you choose will depend on your financing needs and reasons for purchasing real estate in the US. Whether you want to buy a rental property, main residence, vacation home, or a fixer-upper to sell for profit quickly — this determines what mortgage loan is ideal for your needs. Basically, the motive behind the purchase will dictate what type of mortgage is right for your case.  

Because the US mortgage loan market is so developed, it would be impossible to list all loan types that are available to UK citizens. That’s why we’ll only focus on the most popular types. They are:

Foreign National Mortgage Loans

Foreign national mortgage loans are non-qualified mortgages meant to help nonresidents, including UK citizens, purchase real estate in the US. The main upside of these types of loans is that you don’t need to have a US credit score, history, or Green Card to be eligible for one. However, you will need a downpayment of around 25%, amongst other things. 

Foreign national mortgage loans are extremely versatile and can be used to buy many different types of properties in the US, including:

• Main residences (if you’re looking to move from the UK to the US)
• Vacation properties
• Different types of rental properties (commercial or residential)

DSCR Loans

DSCR loans are unique investor-only mortgages that heavily rely on a metric called DSCR score. By calculating the DSCR score of a property, lenders can determine how much money said property can generate in contrast to the loan payments. For example, if a property has a DSCR score of 1, that means that it’s fully capable of generating enough income to cover those loan payments. 

An important thing to note about these loans is that the higher the DSCR score, the more favorable loan terms you’ll be able to get. 

The down payment for DSCR loans is around 25%, and interest rates are between 7% and 8% (August 2024). Because they are investor-only loans, they can solely be used to purchase rental property in the US. And, just like with foreign national mortgages, you can get a DSCR loan even if you don’t have a US credit score or Green Card. 

ITIN Mortgage Loans

Individual Taxpayer Identification Number or ITIN loans are a specific type of mortgage available to all ITIN holders. Although they can be used to purchase investment properties, their primary goal is to help ITIN cardholders finance a residence in the US. Basically, ITIN mortgages are for UK citizens who live and work in the US but don’t have a Green Card and a US Social Security Number. The down payment can be as low as 15% if certain criteria are met, but it is usually between 20%-25%.

Fix and Flip Loans 

Fix-and-flip loans are a type of mortgage that aims to help investors buy distressed, undervalued, or properties in need of renovation, with the goal of fixing them up and selling them for profit. These are short-term loans (usually between 6 months and 2 years). They have quicker closing times than other loans but have higher interest rates (10% or more) and downpayment requirements. Also, a lot of fix and flip loans are interest-only loans.