Tips On How To Buy A House In The U.S.A. When You Are An Immigrant
- by- admin
- 17 Sep 2018
Many immigrants dream to buy a house in the US. Currently, the US is home to over 42 million foreign-born immigrants. As per an analysis in the year 2015, about 40 percent of this population of immigrants own a house in the US.
Although the formal process to buy a house as an immigrant is more or less same as for a native-born citizen. Getting a loan is a more difficult part for an immigrant. The house-buying process has some structural discriminations against the immigrants.
The financial profile of an immigrant is different than the one for a regular home buyer. Therefore, loan services treat them as high-risk clients. Despite that, specialized financial institutions and the US government can help immigrants in buying a house.
Here are some guidelines and tips on how you can own a house in America when you are an immigrant.
Identify Your Budget
Majority of immigrants prefer to pay for a house either in cash or through a mortgage. In case, an immigrant prefers financing, the budget may depend on:
+ The amount an immigrant is willing to spend
+ The amount a lending institution agrees to give as a loan
Many immigrants prefer to buy a house below their actual buying potential. A mortgage as the money loan to buy a house in the US includes the principal amount, interest, applied taxes, and insurance. Lenders often consider the following factors before deciding on a loan amount
+ Gross Income – The income an immigrant earns including income taxes, bonus income, social security benefits, part-time earnings, alimony, self-employment earnings, disability, and child support.
+ Front-End Ratio – The percentage of the gross income an immigrant can contribute towards the mortgage every month.
+ The debt-to-income ratio or Back-End Ratio – The percentage of the income required to pay off other debts, like loans, credit card payments, and child support.
+ Credit Rating – A number given by credit companies to you to decide the risk of lending you money. Immigrants who do not have a credit history have a low credit score by the American lenders and therefore would not be issued a mortgage.
+ Down Payment – The amount an immigrant can pay in cash for the house.
Understand Your Rights as an Immigrant
The Fair Housing Act or FHA is the law according to which housing providers cannot refuse to rent and sell a house on the basis of race, color, religion, sex, national origin, familial status, or disability of a person. According to the law, a person also cannot refuse to make a mortgage loan or discriminate on the same. If you experience any discrimination with the rental or sale of a housing, you can call the nearest Housing and Urban Development (HUD) office.
Shop for a Loan
As an immigrant, you can do a fixed-rate or adjusted-rate mortgage. A traditional fixed-rate mortgage is valid for 15 or 30 years term and interest does not change with the changing market rate. An adjusted-rate mortgage has the interest rate fixed for an initial term. Later the interest rate may fluctuate with the market.
You can obtain a mortgage from numerous places like banks, offline mortgage brokers, and online mortgage brokers. The mortgage provider may request some documents like bills, rental history, and written verifications to check your credit history. You can own a house even if you are an undocumented immigrant. In that case, you can buy in cash or obtain an ITIN mortgage. An ITIN is the individual tax identification number issued by the IRS to the immigrants who are not eligible for a Social Security Number.
Shop for a Home
You can check online websites like Realtor.com for a list of available houses in America. Identify the type of house you would like to buy and take notes about available options. You can negotiate on an offer for a house in the US. The negotiation process may take some time until both the buyer and the seller mutually agree on a price.
You can hire a home inspector to help you analyze the house for any potential issues. You can shop for a homeowner’s insurance to help you pay for any damage to the property in case of a mishappening like a fire. Lastly, remember to ask as many questions as you have before signing the papers and closing the deal.
Marly Tran/ Social Media Assistant
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