I am often asked, “I’m not a citizen of the United States/don’t have a social security, can I still buy a home in the USA?” The answer to that question is absolutely!
Cash Buyers – Foreign Nationals
If you are making a cash purchase on a home, you won’t encounter many obstacles when purchasing. Generally speaking, all you will need to provide is proof of funds for the full amount of the home (and the additional closing costs.) This proof of funds can come in the form of bank statements or a letter from your financial institution. It’s true what they say, cash really is king. As my client, I will also strongly recommend consulting with an American-based, licensed accountant who can guide you through the financial processes that may arise as a foreign national buyer, such as obtaining a tax identification number (ITIN).
Financing a Home – Foreign Nationals
Unfortunately, when it comes to financing, foreign nationals will not have the same advantages and benefits as an American/Resident buyer. Terms will vary from lender to lender, but as a general guideline you can expect the following:
- Higher costs: Interest rates offered by financial institutions will generally be higher for foreign nationals. Foreign buyers can also expect miscellaneous costs such as certified document translations, overnight mail, to name a few.
- Higher Down Payment: Although American citizens and permanent residents can benefit from down payments ranging from 0-20%, foreign nationals can expect to pay anywhere upwards of 30% of the home’s total value as down payment. This percentage will vary from lender to lender, and even from property to property. For example, although you may receive terms for a 30% down payment on a single-family home, a condo (due to its possible volatility in economic crises) will require 45-65% down payment.
- More Complex Approval Process: Lenders may request substantial documentation in order to prove your viability and volatility as a customer. Expect to provide several months’ bank statements, tax returns filed in your home country, series of credit card bills, etc.
- Longer financing period: Due to the long nature of the approval process, foreign national lending can also take longer than the average application process.
Documents Required for Mortgage Application
All of this may seem daunting at first, but with my guidance and my network of lenders you can make your way to homeownership in the USA! Do you think you’re ready? Before we reach out to a lender, here are a few documents worth preparing to make things go a bit smoother:
- Copy of your visa/passport
- Last 3 months of your bank statement.
- Last 2 years of your tax return (in the US or abroad)
If you are self employed:
- Letter stating your income, prepared by an accountant
- Copy of the accountant’s professional license