While you may think buying a home in the United States is impossible if you’re not a citizen, there actually are ways you can reach the American dream of homeownership. Multiple programs and products exist to help borrowers like you break into the U.S. real estate market. One such solution is a foreign national mortgage.
Discover how a foreign national mortgage could help you secure financing for a home on American soil.
What Do You Need to Apply for a Foreign National Mortgage?
Since requirements for a foreign national mortgage can vary across lenders, you will want to double check with your lender about the specific requirements you need to apply. However, there are some general guidelines you’ll need to keep in mind during the application process.
Visa, Passport or Individual Taxpayer Identification Number
In most cases, you may be able to use a viable passport or visa that allows you entry into the U.S. to apply for a foreign national mortgage. If you’ve paid taxes in the U.S., you may also be able to provide your individual taxpayer identification number or ITIN.
Income and Employment
As with any other type of mortgage, you’ll need to provide proof of a reliable source of income which can include any pay stubs, income tax returns or employment verification letters such as a contract or letter from your employer. You may also need to provide bank statements that show you can cover the expenses of buying a home, including your down payment, closing costs and monthly mortgage payments.
Down Payment
Depending on your specific financial situation, your loan and your lender, you may have to put down a larger down payment than other types of mortgages require. In addition, you may be required to have more cash in reserve to ensure you can keep paying back your mortgage for a certain amount of time.
Foreign National Mortgage Advantages
Why should you choose a foreign national mortgage versus other types of home loans? There are some advantages to these types of loans that you can’t typically find in others.
One of the biggest pros is that you generally don’t need a U.S.-based credit score, such as a FICO® credit score, for a foreign national mortgage. Lenders will typically look at other means of determining your creditworthiness or they may accept a credit report from your country of origin. This helps make it easier for non-U.S. citizens to obtain financing for a property since they likely wouldn’t have a credit history in the United States.
Depending on which lender you get your loan from, you may be able to purchase a second home or investment property or even refinance a current U.S. home and take cash out. Some lenders have certain restrictions for your loan purpose and property type so make sure you work with a lender who can help with your specific needs.
Before You Apply
Until you’re entirely ready to start applying for a foreign national mortgage, you should understand some nuances for these types of loans. To ensure you’re getting the financing you need for your situation, take the following into consideration before you apply:
Property Type
Some lenders restrict the types of properties you can buy or require them to be in a certain location. For example, investment properties may need to be in urban areas and second homes may need to be in a resort area.
Documentation
As with any other type of mortgage, it could benefit you to understand the documentation you need before you even apply. You may find that document requirements for foreign national mortgages could be stricter than other types of loans, so getting your documents ready as soon as possible and keeping in contact with your lender could help ensure you’re providing everything they need.
Loan Options
Instead of a foreign national mortgage, you may be able to obtain an ITIN home loan in which you would use your ITIN as your identification in place of a social security number. However, this does mean that you need to have previously filed taxes in the United States.
Find Homeownership in America
Whether you want to buy a vacation home or reap the benefits of an investment property in America, a foreign national mortgage could be your financing solution. As you’re searching for a home, gathering your documents and shopping for a favorable interest rate, it doesn’t hurt to reach out to some professionals, including a lender, real estate agent or financial planner.
This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information on financial planning or investment advice, consult a registered investment advisor or financial planner.
This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.
