Foreign Private Lender

[Justin Yin]

Hello, so I was wondering how the banks or sellers would react if I had financing from a private lender who is located outside the United States? Is that possible?

Thanks!
Justin

[Dion DePaoli]

Justin Yin, I am not sure what Loc R.'s concern is. The bank in your situation is the seller of the home. Whether you put 1% or 99% down will not be all that much of a concern.

What matter is you, the buyer have money to setup escrow. (Check)
And you have funds, either yours or a verifiable source to purchase the home. If you get a lender to give you 110% loan, the selling bank doesn't care, they just want their money.

Foreign money purchases US homes everyday, not a big deal. You may receive a push back if the bank where the money is domiciled is not a large international bank. You can over come this with a fully funded escrow, and may want to explore that as a separate topic if it fits. This will also slow up the transaction as anti-money laundering and counter party risk is a concern for large banks like Morgan Stanley, Wells Fargo, BOA, etc.

All of this come to light because as you turn in your offer and show the deal is financed the seller will want an idea of who is financing the deal. And when they see a foreign lender concerns will come up.

Additionally, depending on how this foreign lender is actually lending you the money, they are bound by lending laws in the United States so if they intend to write a mortgage or deed of trust they will need to be licensed, which the selling bank may have concerns with as well.

How did you think this was going to go down? Is the lender licensed in the US?