In the United States, if you want to borrow money to buy a house, you can prepare three materials after determining the budget: income certificate, bank running water and asset certificate, and submit them to the bank for pre-approval. After getting the pre-approval letter, you can send a letter of acceptance to the seller, sign a formal purchase contract after reaching an agreement, and then hand over the purchase contract and the above three types of materials to the bank to formally apply for a loan. After the approval of the bank, the house payment can be made, and the buyer and the seller complete the transfer procedures; If the bank refuses the loan, the buyer needs to pay in cash or deal with it according to the contract.

1. What is the process of buying a house with a loan in the United States?

1. The buyer determines the purchase budget;

2. Prepare relevant materials and provide them to the bank for pre-approval, and the bank will provide a pre-approval letter.

The materials are usually the income certificate, bank account and assets certificate of the loan applicant, and the materials required by each bank are slightly different. The function of the pre-approval letter is to provide the seller with a bid letter as a reference when buying a house. The pre-approval letter contains the bank's pre-approved loan amount ceiling and the temporarily locked interest rate standard for the loan applicant, and the pre-approval letter is valid for 30-60 days;

After the loan institution is selected, it will fill in the loan application form, which generally has five pages, including the following contents: loan type and term, real estate information and loan purpose, lender's situation, work situation, monthly income and expenditure, property debt and real estate transaction details.

The picture shows the first page of the loan application form of a lending institution.

3. After obtaining the pre-approval letter, the buyer can bid for the property in writing, that is, the bidding letter;

The picture shows a sample tender letter when buying a house in the United States.

4. After reaching an agreement with the seller, the buyer signs a formal purchase contract;

5. The buyer will formally submit the house purchase contract together with the materials required by the bank to apply for a loan, which will be examined and approved by the bank. The approval time is generally 45-60 days. The materials here also refer to income certificates, bank running water and assets certificates, and the specific materials need to vary from person to person;

6. The bank agrees to provide loans, release loans, transfer ownership between buyers and sellers, and end the process of buying a house. Or, the bank refuses to lend, and the buyers need to buy a house in cash or deal with it according to the contract.

Second, what are the misunderstandings to avoid when buying a house with a loan in the United States?

1. When can I find the bank?

Some property buyers think that they should look for a bank account and apply for a loan after they are optimistic about the house. Most think that they should sign a purchase contract and then go to the bank to arrange a loan. This is not the right time. In the United States, if you want to borrow money to buy a house, China buyers need to deposit the down payment into an American account. Therefore, when you plan to buy a house, you should find a bank that can provide loans, open an account before choosing a house, and inform the bank of your budget and schedule so as to get the pre-approval letter as soon as possible. Because in the late auction of real estate, if the seller knows that the buyer needs a loan to buy, he must see the pre-approval letter, otherwise the seller will ignore the auction letter.

The picture shows a sample of pre-approval letter of mortgage loan.

2. When can I apply for a loan?

Formal application for loans, formal submission of materials to the bank is after signing the purchase contract, not at the beginning of buying a house. Because applying for a loan from a bank requires the applicant to provide a formal purchase contract, the bank can lock in the subject matter of the property to be mortgaged by the loan and can conduct evaluation and review.

3. Is it a personal problem for banks to refuse loans?

Practically speaking, after the purchase contract comes into effect, the bank will begin to investigate the credit background of the lender and the net value of the mortgaged property. Therefore, it is very likely that the bank staff will refuse the loan because the property itself does not meet the bank loan approval policy, so the buyer should hire professionals to conduct detailed preliminary investigation to avoid delaying the purchase.

It is inevitable that there will be some extra expenses when buying a house by loan, including mortgage tax rate, loan application fee, real estate assessment fee, credit investigation fee, bank lawyer's fee, etc. Due to the complex content and complicated procedures involved in buying a house by loan, it is recommended that buyers fully understand the relevant knowledge before buying a house by loan.

Source: East-West Bank, China Trust Bank, Cathay Pacific Bank and Citibank.

Liu Zhen, an overseas agent of Chain Home, also contributed to this article.

This content only applies to Beijing.