If you are wondering if an immigrant can purchase a home, the answer is yes. There are no laws that restrict non-citizens from purchasing or owning property. In fact, on paper at least, the process of buying a home as a non-citizen isn’t much different from buying a home as a naturally born citizen.
However, buying a home as an immigrant can be somewhat tricky, especially when it comes to seeking finance to fund your new home. Loan services usually mark immigrants as more high risk, which makes the process far more challenging. Although you may find this difficult at times, it is remedial. Getting to know useful resources and working with the right specialized financial institutions can help you buy a house even if you are not a citizen.
In this article, we break down some basic steps you need to take to own a house as an immigrant.
1. Know Your Rights
Unfortunately in many places, non-citizens suffer from sytematic discrimination when it comes to owning a property. However, the experts at Ybarra Maldonado Law Group explain that there are many laws that make it illegal for housing providers to refuse to sell homes to people based on their national origins. Not everyone can learn the law overnight which is why many immigrants are advised to hire an immigration lawyer to help them through the home-buying and mortgage processes.
With years of experience in handling immigration cases, an immigration attorney will represent you through every step of the purchase, review your loan documents, and advise you with regard to your residential status.
2. Determine Your Budget
As with citizens, most immigrants will not have enough money to buy a house outright and so will need to obtain a mortgage.
To be able to determine how much you can afford to spend on a house, you will need to consider two factors:
- How much do you have available to spend?
- How big a mortgage can you secure from a mortgage lender?
One of the first steps you can do to own your dream house is to save for the down payment, which in most cases, is 20% of the total price of the house. This means that you will need to secure a mortgage for the remaining 80%. Remember that most mortgage lenders will not offer a mortgage exceeding 3 times your annual income so take that into account when you are choosing your home.
3. Get Pre-Approved for Credit for your Mortgage
Most lenders will look at credit history to determine borrower’s eligibility for a mortgage loan. Being a non-citizen, you may not have a credit report, which can result in a longer process and approval time as well as a higher interest rate.
To get pre-approved for credit, you should open a bank and credit card account as well reflect your income in your tax returns. You should also provide your income, saving and investment information so that the lender can refer to them to decide how much they can lend you.
It also helps to choose a financial institution with experience dealing with foreign buyers as they know how to judge your credit history.
4. Obtain Your Mortgage
Once you know how much you can afford to spend on your home and get your credit pre-approved, you are ready to obtain your mortgage. There are two main types of mortgage that are available to you:
Fixed Rate Mortgage
This is a traditional mortgage where the interest remains the same when the market rate increases, and you have a choice to refinance it for a lower rate if the market rates drop. Fixed rate mortgages are usually for a 15 to 30 year term.
Variable Rate Mortgage
This a mortgage that is fixed for an initial term, but the rate fluctuates with the market.
To obtain your mortgage, there are a variety of lenders that you can try. The traditional banks offer high quality service and competitive fees, but they usually make it hard for immigrants as their decision-making process does not take immigrants’ unique situations into account.
Mortgage brokers offer a large variety of loans for immigrants with any credit history. However, they are more expensive and require you to meet face-to-face.
Owning a home is a huge milestone in life and is the culmination and reward for years of hard work and careful saving. Buying a house can be a very difficult process for anyone but particularly for immigrants, it can be a minefield of red tape and complications.
It is important to remember that there are various laws and rights to protect you and your right to buy a house and that you should not be put off or intimidated by anyone. If you want extra help in the process, be sure to hire a specialized immigration lawyer who has experience in dealing with clients who are looking to buy property.