Mortgage over Cash, the smart choice to property purchases
By Milo • 6/25/2021
Paying in cash has become the go-to solution for international clients interested in real estate investments in the United States. While cash-buying may appear to be a straightforward remedy to the obstacles that international buyers face when purchasing properties in the U.S., it is typically not the best financial decision. International buyers can actually leverage their money better without locking it away in a property asset.
Why Do International Buyers Choose Cash When it’s Not the Best Option?
The reality is that most international clients choose to pay in cash to avoid the hassles associated with getting a loan from a typical lending institution as a non-U.S. citizen. Cash-buying also means avoiding the interest responsibilities that come along with borrowing money on a loan. However, the money saved will likely be spent over the life of your investment.
What is the Better Financial Strategy?
In order to establish the best long-term investment strategy for your U.S. residential portfolios, it’s better to finance your investment property than pay in cash.
At Milo, we’re passionate about helping international buyers achieve the best financial outcome when purchasing real estate properties in the United States.
Here are three reasons why foreign buyers should always seek a U.S. mortgage rather than paying for their real estate upfront:
Make the Most of Every Asset to Grow Your Portfolio
When you pay for your property purchase in cash, it uses viable capital from your investment funds. Paying for real estate upfront may use finances that could potentially better serve other areas of your portfolio.
Taking advantage of the easy and convenient mortgage lending process that Milo offers international buyers allows you to use your money more efficiently. When you don’t need to pay for a full purchase in cash, you can use the money saved upfront in other ways. For example, you may be able to use that cash to fuel another investment purchase. Or, you may use the money to fund renovations or improvements to upgrade your other assets.
Unlike cash buying, financing your purchase of U.S. real estate with a mortgage loan offers a better investment growth strategy that factors in the long-term outlook into the equation.
You Don’t Need to Pay to Get Your Money Out
The decision to pay in cash can set up international buyers to pay more fees, charges, and taxes in the future. Once your investment is sitting in physical real estate, you’ll have to pay to get your money out.
When the money is stored in a property, non-us resident buyers usually sell the property outright to reclaim their cash. The decision to sell the property means that international homeowners will be subject to U.S. property taxes owed to the IRS. In most cases, the taxes owed by a foreign national on the sale of a U.S. property is 15%.
However, a refinance cash out loan can also be an option if you already have a property that is full cash owned. This loan will enable you to obtain a loan and receive cash at the same time.
Financing your investment property with a mortgage loan gives you as a foreign investor more benefits over cash buying. If you do decide to sell, you’re not directly deducting from your initial investment. Plus, the property’s mortgage will be paid by your tenant’s rent, making the investment self-sustaining. Purchasing U.S. properties with loans helps investors maximize their returns while safeguarding their investment capital.
Enjoy a Comfortable, Convenient, and Tech-Enabled Lending Experience
Foreign nationals can gain access to premier consumer benefits by choosing Milo to finance their U.S. property investments.
Milo is reimagining the experience that international buyers have with taking out mortgages on U.S. investment properties. With Milo, you have the opportunity to experience cutting-edge lending technologies. Our process is quick, fully online, and secure. We won’t make you travel to attend bank visits. Our estimated rates won’t change too much, if at all. We won’t decline you after weeks of underwriting. Instead, our dedicated loan consultants will assist you with any and all questions that help you get the loan you need.
Besides it being the best option for financing your U.S. property purchase, foreign nationals are fortunate to be in the position to enjoy the Milo experience. Here are three aspects of Milo’s culture that makes it an unparalleled option for international investors:
Get an Interest Rate You’re Comfortable With
Other lending institutions are known to charge international buyers high interest rates on their mortgage loans. This is not the case with Milo.
Milo offers competitive rate loan options for international investors applying for a U.S. home loan. We don’t complicate the process, we make your application and underwriting as simple and clear as possible so that taking out a mortgage is actually a positive experience.
Access Your Loan From Home with Milo’s Fully Online Process
Our technology enables us to accommodate our international buyers from anywhere in the world. Now, you can access a loan from the comfort of your home. We have a fully online process, meaning there are never any inconvenient travel demands. We protect all of your information and respect your data, so you don’t have to worry about your privacy.
Fast and Convenient Application Process
Milo loans are not demanding. Our loans close in weeks, not months. Our clients can seamlessly move from pre-qualification to shopping for their loan, to approval, to finalization. We’re a trustworthy source of financing that international buyers can depend on to cover their U.S. real estate investments.
Just because you can pay upfront for your U.S. investment property does not necessarily mean you should. In fact, financing your purchase with a mortgage loan is better because it considers a long-term financial strategy and protects your principal investment from taxes and fees. With Milo, this is easier than ever.
Milo is dedicated to making mortgage financing more accessible to foreign nationals in the United States. We value your investment potential and want to see that grow through informed investment property strategies. Click here to get pre-approved with Milo as the first step towards your U.S. investment property.