Buying a Home – For Immigrants
Non-U.S. citizens (immigrants) can buy homes in the United States. But are you confused if it’s a good decision for you? Get complete information on this subject provided by Shepelsky Law Firm, one of the most renowned and successful groups of immigration attorneys in the U.S.
DO YOU NEED TO BE A U.S. CITIZEN TO BUY A HOME IN US?
We gave you the answer already: no, you don’t. Now, let’s have a deeper look into this topic.
You are not required to have a U.S. Citizenship if you want to buy a home in the U.S. There are no citizenship requirements for the sale of Real Estate in the United States.
Now it may seem to be the best deal for those who have always wanted to live the American dream. Yes, you may be closer to converting your dream into a reality.
But don’t rush into buying a home in the U.S. Being the most trusted Immigration attorney in the United States, we suggest you grab a good knowledge of the process first.
YOUR IMMIGRATION STATUS MATTERS
The doors to buying a property in the U.S. are always open for Immigrants. But owning a property in the country is a bit challenging for foreign citizens. How?
If you have a Green Card in the U.S., you can sign the deal for your new home without any restrictions and get a mortgage too.
In other situations where you are awaiting Asylum or have a long-term non-immigrant visa in the U.S., or if you have filed for your green card and have a right to live in the U.S. and a work permit, congratulations, you can buy a home, too with your Social Security Number and also get a mortgage.
“What if I’m not in any status of citizenship?”
There aren’t many problems in buying a property in the U.S. without having a citizenship status. But, as a foreign property owner, you will be entitled to pay the FIRPTA Tax of 10% at the time of closing. There are more things about taxation that you must know before buying a property in the U.S. Click here for the 10 Tax Facts that foreign citizens must know.
Moving further, let’s find out how you can own a home in the U.S.
STEPS TO BUY A HOME IN THE U.S.
Step 1: Decide if You’re Ready To Buy A New Home
Buying a house is a crucial decision, both financially and otherwise.
Owning your own home means paying for every repair and replacement (which always runs into thousands of dollars).
The costs of maintaining a property can put a lot of weight on your pocket. Apart from these, Property taxes increase every year, plus you may have to pay an annual homeowners Association Fee/Community fee that also increases every week.
Once you own a home, you enter into a sphere of life where you have to prepare a long list of expenses that also include the cost of damage repair after a flood or a storm.
Because even if you have homeowners insurance, you need to pay upfront to the repairing contractor as it takes months to get the reimbursements from insurance companies.
A few questions that you must ask yourself before buying a home –
● Are you willing to stay in one place for a longer period?
● Do you have the required credit score to qualify for a mortgage?
● Will you be able to make the monthly payments?
Once you get the answer to these questions and consider all the other factors like financial readiness and lifestyle preferences, you are ready to make a decision.
If it’s a yes, you must also keep in mind the market conditions, including economic health, current mortgage payments, etc., to identify the best time to buy a house.
Step 2: Calculate Your Budget – Monthly Payment
The second step is one of the most crucial ones that demands a close evaluation of your finances and an honest figure that you can actually afford to pay in monthly payments.
If your mortgage payment, home insurance, flood insurance, and all your monthly bills (like car payments, utilities, and credit card payments) are equal to 43% of your monthly income, you are in a good financial condition to buy a home.
Any percentage below 43 is going to put a strain on your finances.
After doing a bit of math on your finances, if you get the answer of more than 43%, start looking for homes online on websites like Zillow.com and find relevant listings of homes available for sale in your choice of location.
A quick tip from the best immigration attorneys in the U.S. for foreign buyers- Areas with schools tend to be expensive, and the property tax is also comparatively higher.
Step 3: Save For Down Payment And Closing Costs
Now we’re talking about real money. In this step, you need to find out how much funds you need to have before buying a home.
The key areas of expenses for which you need funds:
- Down Payment – a large, one-time payment toward the purchase of a home. Most banks will require you to deposit a 20% down payment to buy a home. But there are different programs where you can put down as little as 3%. Federal Housing Administration (FHA) loans for only a 3.5% down payment. Department of Veterans Affairs (V.A.) loans and United States Department of Agriculture (USDA) loans even provide benefits to the eligible and qualified borrowers like a 0% down payment. However, it will cost you MORE per month as the banks charge private mortgage insurance (PMI) for the risk of you putting down less than 20%.
- Closing Costs – between 3 to 6% of your home purchase price to be paid in one lump sum at the closing. This includes title insurance, recording fees, mortgage-related fees and taxes on the purchase. (The exact closing costs will depend on your loan type, your lender and where you live.)
- Other Costs – Specialized inspections (like lead, radiation or pests), appraisal, minor repairs, and some others.
Step 4: Choose What Type Of Mortgage Is Right For You And Get Preapproved For A Mortgage
There are two primary forms of mortgages: fixed-rate and adjusted-rate.
The first one, a fixed-rate mortgage, is a traditional mortgage, and they’re usually for a 15- or 30-year term, which gives the immigrants 15 to 30 years of time to pay them off.
And the main thing, the interest doesn’t change even if the market rate changes.
In case the interest rates drop, immigrants can refinance the mortgage for a lower interest rate.
On the other hand, in an adjusted-rate mortgage, the interest rate is fixed for an initial term but then follows the market fluctuations. It means the interest rates will not be fixed for the time you’ll be paying off the debts.
Step 5: Find a Trustworthy Real Estate Agent For You
Remember that your Buyer’s agent has to work for YOU, and you may need to see many houses before you find ONE. They have to be patient, smart and strong and fight for you when you make the offer.
Step 6: Begin House Hunting
The right home has to work for your family with location, financial costs, enough room for all your family needs, and be near good schools if you have children. Remember to think of your daily commute and how much toll it takes on you if you have to drive for 2 hours one way to work. Remember about having to take your kids to activities, having good shopping and restaurants nearby, as well as entertainment for kids and adults in the family.
Step 7: Make Offer On A House
People usually bid a bit less than the house sale price listed, but when it’s a Seller’s market (high demand in the area you are looking in and very few houses available for sale – you may have to bid OVER the asking price to get your offer selected.
Step 8: Get A Home Inspection
Hire an independent licensed engineer/inspector who is local to the area where you are purchasing. Review the engineering report and do not be shy to ask either for the Seller to complete the repairs necessary or get a credit towards the purchase price (a discount). Be mindful that in the Seller’s market, this may cause you to lose your bid.
Step 9: Get A Home Appraisal
Your bank will appraise your property as part of the mortgage process, and you will have to pay for it.
Step 10: Work on your Mortgage Application
Make sure the title report is completed and clean. Make sure you identify all problematic items to be taken care of and pay them off by the Seller at closing.
Step 11: Do A Final Walkthrough
I recommend that 48 hours before your closing, you walk through the house and turn on A.C., heating, and appliances, check if plumbing works and if all the garbage and personal property are removed by the Seller.
Step 12: Close On Your New Home
Attend the Closing. This is where you sign your mortgage documents, pay the Seller and all your closing costs, and get keys to your new home. Find more facts explained by our immigration lawyers about how your investment into buying a home can affect your status of citizenship in the country. Book a consultation if this is something you and your family want legal support with.
FOR INVESTMENT PROPERTY
If you plan to invest in property in the United States, consider the following facts and things you must take care of:
- You can get some investment visas if your business will be to run a real estate property as a business and even give other people jobs with your business.
- In some cases, if your investment is over $1 Million, you and your immediate family members can get Green Cards from your purchase of a real estate in the USA.
- Make sure your profits will cover your expenses and that you make some money in the short term. In the long term, as you pay down your borrowed credit and pay off the mortgage – your equity in the property will grow, and the price of the property will increase as everything increases with time as a result of inflation.
- Remember, just because you own a real estate property in the U.S. does not guarantee you any visas (even a Tourist B1/B2 Visa) to come to the U.S.
- Real estate ownership in the USA is always a great idea. In these times of rising inflation, it is a great idea for immigrants to keep their money invested in buying a home rather than the rollercoaster of the current market.
ARE YOU AN IMMIGRANT AND WANT TO BUY A HOME IN THE U.S.?
If you want to buy a home in the U.S., there are different options available for you based on your status of citizenship.
But things can be tricky for immigrants buying a home as the procedure requires a proper evaluation of your citizenship.
To avoid any unfortunate situation, contact the most renowned and trusted group of immigration attorneys in the US, Shepelsky Law Firm.
We help immigrants by guiding them with the most relevant and beneficial pathways to buying a home in the country. If you are a non-U.S. citizen in the country or a foreign citizen who wants to invest in real estate in the country, contact us today to know what benefits you can get.
Contact Shepelsky Law Group to know more about buying a home in the U.S. as an immigrant.