Buying A House as An Immigrant in The U.S.

At the moment, there is no law in the U.S. that forbids undocumented immigrants from owning properties. Whether you are a native, a resident, or an immigrant with no legal status, the simplicity or difficulty of buying a house in the U.S. depends solely on how you pay for it.

Buying A House with Cash as An Immigrant in The U.S.

When you have the financial stability to buy a house with cash, there are no requirements you need to comply with to buy it and own it. No legal status is needed either. Still, there are a couple of things you might want to consider when buying a property. And the seller will probably ask you about them too.

Proof of Funds

Sellers must be sure that you own the amount of money you’ve agreed upon. This is why they usually ask for proof of funds from a bank. Proof of funds usually comes in the form of a letter.

Earnest Money

Earnest money is a “good faith” deposit that buyers make to the sellers so they can take the property off the market while the buying process is going on. It also lets the sellers know that you’re actually buying the property and getting involved in the process.

Applying For a Mortgage Loan as An Immigrant in The U.S.

This is the most common practice worldwide. Not many people have hundreds of thousands of dollars laying around to buy a property. So, the most natural step to take is applying for a loan. But here is where things get complicated. We will mention some of the most common documents and statuses lenders request from applicants. Please note that this may vary. It’s not just complying with a checklist. Lenders evaluate many characteristics. They may be able to approve or deny an application whether you comply with all their requirements or not.

Common Documents Required to Apply for A Loan

When you apply for a loan, lenders will need to make sure you are reliable. This is why it is very important to have your finances and obligations organized. If lenders see that you have all your papers in order, keep every proof of previous works and payments, and pay your credit card and taxes on time you will earn their trust.

These are some of the documents that lenders may ask you to provide to determine your financial stability.

• A valid passport
• Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
• Proof of funds
• Proof of payments/pay stubs
• A good credit score (580-760)
• Income tax return

Common Statuses Required to Apply for A Loan

Real estate agents and lenders look at documents or any evidence that can prove you can religiously pay for a loan. But they also look at specific statuses. And these are very important if you want both of them on your side to have a quick buying process.

Loan Pre-approvals

Loan pre-approvals are a way for real estate agents to know that you qualify for a mortgage. Lenders look through the documents we mentioned in the previous point. If your documents are in good shape, it is highly probable they will write a pre-approval letter.

Two Years of Steady Income

Most lenders will require you to have a steady income from the past 2 years. Some of them even want to see that you have worked for the same employer for 2 or more years. Independent workers are asked for their past 2 Income Tax Returns.

Credit History

To have a credit score you first need to start to build a credit history. And you can build a credit history by:

• Applying for a credit card or becoming an authorized user of one
• Paying rent and utilities. Make sure you look for the specific services that can report these payments for your credit history.
• Paying your credit cards and bills on time. Please note that having late payment fees won’t help your credit score.

Debt-To-Income Ratio

DTI or Debt-To-Income ratio is a percentage used by lenders to determine how much money from your income is dedicated to paying debts such as loans and credit cards. If your monthly income is USD 4,000.00 and your monthly debts make a total of USD 1,000.00, then your DTI is 25%. (USD 4,000.00 / USD 1,000.00) x 100%.

The usual accepted DTIs are 50% or lower.

Final Words

Getting your dream house shouldn’t be a nightmare. As long as you know your rights, do things properly, and have a lot of patience, it is possible to buy one, even if you are an immigrant with no legal status. But beware, the fact that you can own a house in the U.S. without a legal status doesn’t mean you don’t have to start getting one. Make sure you are able to enjoy your new house with the harmony a legal status can provide. Castro Law was built to help immigrants have a pacific life in the U.S. by guiding them throughout their immigration processes. Feel free to contact us for more information.