US citizen foreign income overseas, can I get bank financing?

Question

Hello everyone! Thanks for your reply in advance!

1. I'm currently working overseas and have been for several years 5 years to be exact. And I was wondering about my financing options having a foreign income from a foreign overseas company.

2. If I were to be able to get financing from traditional banks and not basing my loan on property and cash flow numbers, what do I need to do to qualify? This is probably a CPA question, but wonder if there's anyone in my situation as well? What documents do I need, what do banks look for and what's the LTV I can get from banks in the Southern California area?

Thank you!

Upen Patel · Answer

@Rick Lee As long as your income can be substantiated with documentation and you have been filling your US tax returns, you can get a conventional loan.

George Griffith · Answer

Hi Rick.  It is possible to obtain financing from traditional banks as a US citizen living overseas.  In a recent case I remember, the client was successful obtaining the loan because he declared taxes in Brazil, where he earned his income working with a local corporation, and he also reported this income yearly in the US, and this was the key.  Other important factors, of course, include credit history, debt servicing or debt to income ratio.

Bruce Lynn · Answer

Potentially yes....but there's lots more questions they will ask.

Same company?  Do you put the money in the bank every month?

Do you file tax returns.

Do you have pay stubs.

Do you have a credit report....

Troy Williams · Answer

@Rick Lee

@Upen Patel & @George Griffith  are both correct.  I just completed this process myself.  I live abroad, work for a local company and pay taxes in this country, and just closed on 2 triplexes in the USA last month.  Here's a basic list of what I had to provide:

• Tax returns for last 2 years,
• Proof of income from local company,
• Enough savings to afford the 20% deposit + 6 months of mortgage payments.
• Debt to income ratio of not more than 48% (lenders vary on this amount
• Notary from local US embassy (if you cannot be in US on closing date, you will need someone to sign for you)

The rest is up to smart research and due diligence.  Be sure you have someone to handle management on US side.   If by any chance you are interested to invest in Colorado, I have property management services and agent contacts that could help you.

Good luck!!

George Griffith · Answer

Bruce, the most significant way of improving your credit score is by paying your minimum balance and a portion over it on time each month.  Of several variables that affect a credit score, timely payments is the measure with the most weight, so paying a balance on time over six months can have a very positive affect on your score.  If you do not possess a US credit card, I would suggest you apply with your US bank.  Alternatively, Capital One is a very friendly credit card company, or you could establish an account with Citibank or HSBC, which to my memory, have the means to take your US credit card application overseas.

Bruce Crawford · Answer

Great question - one I have been wondering and was going to post. Thanks!

For your “pay stub”, I work in Japan (10 yrs now) and they have an electronic version but it is not sent to me. I need to log onto the payroll company site to get copies - I needed to do that for property here. That may be an option. My assumption is that since I file US taxes every year that I should be OK. My concern is my credit report as I only have a bank account in the US where I pay my monthly VOIP bill from.  I requested my free credit report but never received it.

Any thoughts on how to improve my credit score if not living in the US? Hopefully I don’t need to, but thought I’d ask just in case.

Rick Lee · Answer

Thank Upen, yea let me get those in order first and then start looking at auctions.

Rick Lee · Answer

Thanks Bruce for your prompt reply! You're right, I'm trying to file my taxes for the year that I missed, and Pay stubs are bit hard as everything here in asia is electronic and everything is wired to the bank directly, so i'll be going to the bank tomorrow to get a copy of the pay records.

As for credit report, yes my mom fortunately has been keeping up with my credit score with her occasional spendings and clearing the payments as they come.

US citizen foreign income overseas, can I get bank financing?

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