America’s banking sector consists of 3 parts. The financial sector is overseen by the Federal Reserve, which consists of 12 local organizations, as well as member banks (about 3,000), the Board of Governors, the Federal Open Market Committee and various advisory boards. The Fed has a supervisory and regulatory function.
The second level consists of commercial banks, savings associations and non-bank organizations. Private credit institutions provide a wide range of financial products (traditional lending, fiduciary management, brokerage, etc.).
At the third level are credit unions and mutual loan societies (MLCs). The activities of these organizations are licensed by state authorities. These structures are exempt from taxes.
There are four major types of loan products in the United States: mortgages (mortgages), auto loans, student loans, and personal loans. Interest-bearing loans represent more than 50% of assets in the U.S. banking sector.
U.S. bankers consider home loans to foreigners risky. The cost of a mortgage for an immigrant will be higher than for a U.S. citizen at 1-2% per year.
In addition, the potential borrower must provide the following papers:
Recommendation letters from banks, confirming the reputation of the client. The period of cooperation with the financial organization must be not less than 2 years.
Credit history.
Account statement, confirming the presence of a down payment. Experts of the American Mortgage Association recommend saving the amount equal to 15-25% of the market price of the purchased property.
Documents on income or accounting statements (for business owners).
The package of papers is formed on an individual basis. The rate on mortgage loan can be floating or fixed. It is also possible to use a hybrid rate. This mortgage loan option allows the borrower to pay a fixed rate to the bank for a number of years. After that, the rate becomes dynamic.
A floating rate is usually tied to the value of government bonds, LIBOR and other parameters. The term of a mortgage loan is between 15 and 30 years. Mortgages are most popular in states with relatively cheap residential real estate (Georgia, Arizona, Michigan and Philadelphia).