Since 2020, the U.S. housing market has been rising rapidly. Many Chinese in the U.S. who have small savings see this trend of soaring housing prices and hope to buy a home as soon as possible to preserve its value and increase its value in order to resist the inflation brought by the government’s massive issuance of money.
However, as we all know, several major banks in the U.S. require proof of income (such as pay stubs, tax records, etc.) before they can provide loans, which discourages some Chinese who are running a restaurant or service business in the U.S., or who have high cash income but do not pay enough taxes, because it is difficult for them to provide the appropriate proof.
Home loans without income check are popular among new immigrants
Under this difficult situation, Chinese banks see the business opportunity and launch the no-income mortgage loan policy accordingly.
Of course, without a certain amount of income to support the loan, the buyer may not be able to make the monthly payments on time and the house will become a foreclosure. In order to avoid these risks, banks will be more strict with other requirements for applicants, such as high down payment, good credit score, and more reserve.
The no income check home loan is generally welcomed by the Chinese and has facilitated many new immigrants to realize their dream of buying a home, but there are “deep pits” in it.
A few days ago, netizen Zhang exposed his story of being fooled by a Chinese bank broker in the process of buying a house: “I found xx bank to do no income check loan, credit score of 800 or more, paid 30% down payment, the bank did a month and a half. During this period, constantly confirming whether there is any problem with the loan, the other side kept saying there is no problem and let us rest assured that the transaction.
We were also very cooperative with the bank’s requirements and passed whatever documents we wanted to the other side on the same day. Two months later, we were finally told that the loan was approved.” But although approved, but there is a condition is to check two years of tax documents. The company’s main goal is to provide the best possible service to its customers.
“The loan officer did not want to help us solve the problem, did not contact us for a week, a word of apology did not say. Until today, he contacted us and said there is a solution, which is to borrow a loan shark, 8% interest, 3% fee, which is almost 20,000. After that, we can help us to re-loan, and then charge 1% fee, of course I do not want to, he said that re-loan 1% does not charge you, how cost-effective ah.”
“I was dumbfounded, I did not want to, he complained that I was pretentious, that I had poor mental capacity, that he did not want to talk to me again, did not want to receive my phone calls. He also said he often had cases that he did badly and the big deal was to do HARD MONEY loans to get the money out at high fees and interest rates and be done with it.
This makes me wonder if he is deliberately screwing up his clients’ loans and then charging high fees to be a loan shark? The house sale was interrupted, the notary lost part of his deposit, the inspection and appraisal fees for the house, and the credit report fees for the loan application were gone.”
5% down payment to buy a house, interest rate of 3.5%, and no income check?
According to the reporter’s investigation, there are many small and medium-sized Chinese banks or loan companies in major Chinese websites and forums to attract customers to advertise “U.S. home loans, 5% down payment on a house, 30-year fixed interest rate of 3.5%, no income check” and so on.
This is exciting, but also suspicious, because BOA and Chase and other large banks that strictly check income, the lowest interest rate is 2.85% or even more than 3%, but they can actually do 5% down payment, 3.5% interest rate, will there be fishy? This has also led to a lot of debate among netizens.
A certain no income check loan advertising post (source: network)?
Netizens express their opinions on a certain no income check loan (source: web)
So, if you really need to do a no income check loan, what exactly are the credit score, down payment, and reserve requirements of the more reputable Chinese banks? What is the minimum interest rate that can be achieved? What are the monthly payments? What is the cost of loan approval? In this regard, the reporter interviewed the loan officers of Huamei Bank and Cathay Bank.
The loan officer of Huamei Bank Ms. Tan and Ms. Chen said: “Huamei does not check the income proof of the loan does not require citizenship or green card status, social security number is not required, credit score to look at, not too low, but not so important. The most important thing, one is 40% down payment; one is nearly 30% reserve (60 months).
“If you are buying your first home, take the example of a house with a price of about $700,000, you need to prepare a down payment of $280,000 and leave it untouched for two months in the lending bank. The reserve should be prepared around 200,000, which can be proof of assets such as cash, stocks, house, etc., but it must be in the person’s name.
“This month, we just adjusted the interest rate of the loan, slightly higher than last year, if the 30-year repayment period, there are currently four fixed interest rates available for the first 3 years, the first 5 years, the first 7 years, the first 10 years, the lowest interest rate of 4.0% for 5 years, point fee is 1.25%; the highest interest rate of 4.65% for 7 years, point fee is 0.375%; 10-year average interest rate of 4.5% or more. The current approval time is still very long, at least 60 days or so.
“This works out to a monthly payment of about $2,100 per month, and the bank approval fee is $1,200.”
For his part, Mr. Tony, a loan officer at Cathay Bank, said, “Cathay does not check income proof for loans, does not require citizenship or green card status, social security number is fine with or without, and requires a credit score. The financial requirement is 30% down payment and 20% reserve (36 months).
“If you are buying your first home, take the example of a house with a price of about $700,000, you need to prepare $210,000 for the down payment and leave it in the lending bank for two months. The reserve should be prepared about 120,000, which can be cash, stocks, proof of assets such as a house, but it must be in the person’s name.
“On the loan interest rate, if the repayment period is 30 years, there are currently two fixed interest rates to choose from for the first 3 years and the first 5 years, the lowest interest rate for 3 years is 4.25%, no point fee; the lowest interest rate for 5 years is 4.5%, no point fee. in addition, if the purchase is successful, the buyer agrees to open an account with Cathay and automatically debit the money from the Cathay account monthly payment, then the interest rate can also have a 0.125% reduction. This would make the 3-year minimum interest rate 4.125% and the 5-year minimum interest rate 4.375%. The current approval time is almost 60 days or so.
“This works out to a monthly payment of about $2,400 per month and a bank approval fee of $880.”
However, a Chinese bank employee said privately that he also does not do mortgage loans in the bank where he works because of the large down payment, expensive fees, slow approval and high interest rates, the only benefit is the ease and simplicity of operation and the high chance of loan success.
In fact, new immigrants from overseas are also the last resort to choose to make loans from Chinese banks without checking their income, so they should be more cautious and careful not to be confused by the low down payment and low interest rate promises of some Chinese lenders on the Internet, and lose out on the big things because of the small things, instead of delaying the purchase of a home.
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