Weakening US housing market weighs on dollar

The stumbling US housing market could cause a further weakening of the dollar as it hit a three-week low against the euro, according to recent reports.

With the dollar currently trading at $1.3443 against the euro, there has also been speculation that it might yet break the $2 to sterling barrier once again, depending on US federal and British interest rate changes and reinforcing the need to get the best exchange rates.

This has also cut the yield premium for US Treasuries, Bloomberg news agency reported.

Sue Trinh, a foreign exchange specialist with RBC Capital Markets in Sydney, told Bloomberg: "The dollar's yield advantage has waned. The market is vulnerable to weaker housing data and that will weigh on the currency."

Meanwhile, the Wall Street Journal has reported that the dollar could gain against the yen, partially due to the prospect of higher interest rates in Japan.

Last week, the yen weakened significantly against the euro, with 1,000 yen currently trading at 6.010254 euros.

Recently there has been a considerable influx of foreign investment into the US property market, with many keen to capitalise on what are very low current property prices; this is especially the case in the more popular holiday destinations such as the “US Sunshine State” of Florida. There has been a significant rise in the number of British buyers in Florida over the past few weeks, for not only can a Brit benefit by having a wide selection of “low priced” homes to choose from, they can also take full advantage of their sterling buying power and with the current prospect of an even more favourable exchange rate peaking, Florida property sales to Brits seem likely to soar skywards over the next few weeks!

To obtain a free DVD “The definitive guide to buying in Florida” call the UK number 08456 444 747 or e mail us with any questions about this subject at enquiries@countrysideinternational.com

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Florida Mortgages for foreign nationals

Watch the video on Florida Mortgages

Foreign nationals who seek to obtain a mortgage when making a Florida property purchase, can do so, subject to qualification, in a relatively simple manner.

- Up to 80% of the purchase price or valuation (appraisal), whichever is the lower is normally readily obtainable.

- Fixed and/or variable rate loans of up to 30 years are normally freely available, regardless of ANY age.

- Some loans can be repaid in either US dollars or another currency and sterling loans often are available with fixed terms and currency exchange rates.

- Interest rates do of course vary according to the type and time of the loan;generally a foreign national /investor will pay 1% more than a US resident. Interest rates currently range between 1% and 8% (May 2007)

An applicant should be able to provide the lender with a list of certain documentation, as proof of ability to repay the property loan and normally the best available rates are freely obtained when supplying the maximum amount of documentation.

If you are planning a trip to Florida with a potential property purchase in mind, we recommended that you take with you a few important documents, which are listed below. Of course you may however have already supplied these dociuments to a suitable lender for a prior loan pre-qualification.

The recommended documents are:

Employed
A minimum of 2 years Inland Revenue P60s, plus copies of tax returns, if available and your most recent pay slips, covering the prior 30 days.

Self-Employed
A minimum of 2 years accounts, plus a letter from you accountant confirming Inland Revenue approval.

Employed & Self Employed

a) A minimum of 3 months Bank and/or Building Society and/or Stocks and Share statements. The statements should provide evidence of the whereabouts of your intended down payment (deposit) on your property.

b) Proof of title deeds to any unencumbered asset.

c) A copy of a full years-Council tax (rates) demand on your UK home. This is to prove that your permanent home is in the UK.


Non-income verification loans

- Non-status (self-certification) loans are readily available, although documentation similar to the above is still required without the income verification, which is merely stated. This is due to the loan being based on the strength of the asset.

- Although the maximum percentage of these loans varies from time to time, normally they are freely available up to 75% of the purchase price, subject to a satisfactory appraisal. In certain cases a possible 80% non-status can be arranged, although the interest rate is then loaded.

- US lenders offer a variety of flexible mortgages, which can be tailored to your particular needs. Interest rates vary just like they do elsewhere in the world. You can choose between a variable and a fixed loan, although most popular with overseas buyers is a loan capped on an annual basis, in intervals over the life of the loan. These are more commonly known as A.R.M.S. (adjustable rate mortgages) and they are normally available with capping options at 1, 3, 5 & 7 years.

The purpose of the capping is to control the interest rate within a specified percentage range, which can provide peace of mind when on a budget. The fixed rate loans are normally repaid over 15, 20 or 30 year terms.

- U.S. loans will normally cover the repayment of principal property taxes, interest and hazard insurance. Many carry no pre-payment penalties and should you decide to make additional payments each year, you can reduce your term substantially, which is well worth consideration!

- Interest only loans are available

Countryside International/Florida Countryside personnel have full knowledge of several independent lenders and brokers with expert knowledge in their field and a personal introduction to ensure the best possible advice is obtained is highly recommended.

A loan pre-qualification prior to any purchase is advised & is freely available upon request without any obligation.

Mortgage Approval

Once a mortgage application is presented at the time of any purchase agreement, normally a lenders acceptance confirmation is forthcoming within a 4 to 8 week period from the time of submission.

When the acceptance notice is received, you are required to sign the authority and if you have not already done so a 'down payment' is made which is normally the balance of 5 % 10% or sometimes even 20% (an initial holding deposit may have already been paid) the exact sum will of course depend on the contract terms.

This stage is the US equivalent of the UK's 'exchange of contracts' and pre-payments and closing costs together with the additional deposit balance are payable at closing.

Purchasing a property with cash

If you pay by cash, there is no requirement for any pre-payments and the closing costs are reduced.

Closing (Completion)

When a new property is being built, prior to closing an orientation (walk thru) with the builder takes place. This involves either you or your representative (brokers like us often provide this free service for their clients) checking the property to ensure entire buyer satisfaction. (snagging list).

The 'Title Company' then conveys the title (a title insurance policy is issued) & ensures that the appropriate monies are distributed to all of the relevant parties. They do not act for either seller or buyer and you can rest assured that the money is protected and dispersed correctly. The closing costs are similar in many ways to the items we pay in the UK Stamp duties, etc. Although the main cost is attributed to the mortgage loan.

It is prudent to allow up to 4.5% (four & a half per cent) of the total purchase price, to include disbursements (this is the maximum sum it should cost you). A cash purchase should reduce this sum to a sum ranging from 1.5% to 2%.

A breakdown of the estimated associated costs is provided by the lender once details of the property chosen is known.

Taxation

- Property taxes normally amount to approx. 1.5% (one & a half per cent) of the property's value, which is commonly paid on a monthly basis along with the mortgage payments.

- A sales tax is charged on all rental income and currently is 12%. It is the equivalent of the UK's VAT. A tax treaty between the UK and USA means that double income tax is avoided although all rental income must be declared.

- As a guide; all relevant expenses including the mortgage interest can be off set against any due tax from rental income and once all of the appropriate expenses are taken into account, in certain cases often the tax is wiped out completely; this of course will depend entirely on the individual personal circumstances.

It is recommended that ALL buyers obtain expert professional advice regarding taxation and Countryside International/ Florida Countryside personnel are happy to make introductions to an appropriate qualified accountant/taxation lawyer upon request.

Interested to know more? Contact Countryside International on UK number 08456 444 747 or visit www.countrysideinternational.com

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Moving to Panama - a tropical retirement paradise

Just a two and a half flight away from the US “Sunshine State” of Florida is Panama, a country about the size of Scotland with a population of some 3 million at the “Gateway” to South America, adjoining Columbia and Costa Rica in Central America; it enjoys a safe and wonderful climate free from any earthquake or hurricane.

About 1 million of the population live in Panama City, home to around 150 International Banks and a major off shore finance centre; the International Airport enjoys flight connections via major US destinations, thereby providing ready access to most places in the world.
This is an interesting country that is probably best known for its famous Canal, a most valuable asset that is widely thought to be the main reason why in 1989 US troops ousted its former dictatorship leader General Noriega.

Since this historic event took place, the US influence and support has helped Panama to grow to a point where it now provides new residents with an attractive affordable lifestyle for a fraction of the cost in the USA and its steady economic growth and political stability is providing those that choose to invest with that much needed peace of mind.


The country’s future does seem to be assured and the growth rate is helped by new businesses, which are seemingly arriving weekly plus so are many new residents; the main reason for the population growth is the Panamanian authorities desire to increase the numbers by way of the “retirement visa” programme which is specifically aimed to attract US retirees; however the opportunity equally applies to other foreign nationals who can meet the low cost and simple visa qualification criteria.

A variety of attractive tax incentives operate for retirees in Panama and this together with the country’s many other virtues is aiding to make this tropical paradise a haven of opportunity!

Such virtues as; the low cost of living, a warm tropical climate, stunning and most beautiful terrain encompassing; mountains, rain forests, scattered islands and a fine sandy beach coastline, there are 3 different oceans, (the Caribbean Pacific and Atlantic) plus of course the country has a variety of quality and highly affordable housing to choose from; all in all new residents and property investors alike are now taking advantage and are starting to arrive in droves!

To qualify for a retirement visa, a minimum $200,000 cash investment is required within the property purchase/s, plus the authorities need to see proof that the applicant is drawing a pension anywhere in the world; when these two principal requirements are fulfilled, the applicant should be granted a visa!

Foreign property investment in Panama today is indeed rife; many are to enjoy the prosperity that should be forthcoming that has recently been assisted by the recent referendum in the country. This has provided the official go ahead for a 7-year building programme that involves the expansion and rerouting of the Panama Canal.
This major additional new-found opportunity will help those capitalising on the opportunities by investing in the country; many new luxury developments are suddenly springing up everywhere and most enjoy Property Tax exemption, which alone is simply a great investor attraction.

The luxury waterfront high-rise condos and beachfront holiday homes being built are at most attractive prices; a good quality home can start from as little as $140,000, albeit if you are seeking something at the real high end, say around the $700,00 to $900,000 mark in a golf and/or beachside location, it can still be found!

In Panama an unprecedented economic property boom is currently taking place and for those interested it is certainly still not too late to join!

Interested to know more? Contact Countryside International on UK number 08456 444 747
or visit www.countrysideinternational.com

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