6 Tips for Buying A House in USA for Non Residents
Buying a house in the USA for non-residents and citizens alike is a big part of the American dream. Owning a home can help provide stability and can be a financial asset. Can foreigners buy property in the USA is a common question. Another is if buying a property in the USA gives you residency.
We’ll answer those questions and detail what non-residents need to buy a house in the U.S. and give you some additional tips that will help make your dream of homeownership come true.
Buying a house in the USA
In previous articles, we’ve talked about why credit is so important in the U.S. That is especially true when buying a house. The typical home price in the U.S. is $287,148. Not many people can afford to buy a home for cash. That means you’ll need financing in the form of a mortgage.
To be approved for a mortgage, you need a healthy credit score. To get the best interest rate on your mortgage, you need a credit score somewhere around 760 or higher. Interest is essentially the cost of borrowing money, so the lower the interest rate, the cheaper the loan. Even a 1% difference in rates means the difference of tens of thousands of dollars over the life of your mortgage.
Buying property in the USA for non-residents
A non-resident alien can buy a house in the U.S. There is no citizenship requirement for real estate sales. But buying a property in the USA does not give you residency. Not only can non-US citizens buy a house in the U.S., but they may be able to qualify for a mortgage as well.
Lenders will require the following from non-residents seeking a mortgage:
A credit score of at least 720, ideally 780 or higher
A 20% down payment or more
A Social Security Number or ITIN
A current source of U.S.-based income that is expected to continue for at least three years
Proof that you’ve been in the U.S. for at least two years
At least two years of U.S.-based work experience
Planning to buy a home in America
These tips will help make the process of buying a home in America easier and less expensive:
Build or improve your credit score. Aim for a score of at least 760.
Work with a real estate agent who has experience working with non-residents.
Acquire an ITIN which helps make it easier to open a bank account, pay income tax, and qualify for a mortgage.
Find a lender that offers ITIN mortgages. These essentially work the same as a standard mortgage but do not require citizenship or an SSN. You make a 20% downpayment and have a 30-year fixed-rate mortgage. The downside of an ITIN mortgage is that the interest rate is often higher than that for a standard mortgage.
Keep your total housing costs (mortgage, insurance, property taxes) at 30% or less of your budget.
Gather financial documents, including tax returns, proof of income in the form of pay stubs, W2s, or other documents, bank statements, investment account statements, rental payment history, and photo identification.
Upwardli is here to help
Upwardli can help you find the tools and financial products that can help make your dreams of owning a home come true. We can help you find tools to build and improve your credit and the resources to improve all aspects of your new financial life in America.