Updated: May 25, 2023

How Foreigners Can Start the Home Buying Process Today

A foreign home buyer in the United States can obtain a home loan, it just takes time. Learn how you can get started on that process today.
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Buying a home and establishing a permanent place of residence is part of the American dream. While many foreigners come to this country on a temporary visa for work or school, some may be interested in purchasing a home.

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Truth be told, the process may not be so easy, as lenders have certain procedures they use to qualify borrowers.

If you are a foreigner that is contemplating to buy a home in the U.S., learn about how you can become eligible for a loan.

Types of foreigners

The United States government recognizes different types of foreigners here in this country.

  • Permanent residents - These are people with green cards and a valid Social Security number. These people are legal U.S. residents and can usually obtain a home loan with ease (as long as they meet credit requirements).
  • Non-permanent U.S. citizen. This type of person does not possess a green card, but has a valid Social Security card. They are either here on a visa or undocumented. If this applies to you, consider obtaining a green card as soon as possible.

By establishing permanent residency in the United States, you will be on your way towards eligibility for a home loan. But this is only part of the process, the other major part is establishing a credit history.

You must first establish credibility in the U.S.

For the most part, lenders will not provide a loan for a foreigner without credit in the United States. This is primarily due to the fact that lenders have no idea how to determine whether or not a foreigner is a reliable borrower. Many countries do not have a credit tracking system that banks find legitimate.

Foreigners from countries such as England, Canada, and Australia do have a credit tracking system, but it may be hard to convince a U.S. bank to provide you with a loan. If you do have credit elsewhere you should retrieve documents that show this credit history. You may be able to convince a lender you are trustworthy enough to take out a loan. However, when applying for a home loan, you will most likely need to provide at least 20 percent as a down payment.

A foreigner who is not able to take out a home loan is first going to have to establish credibility in the U.S. That means opening a credit card, a personal loan, auto loan, or some other type of commitment which helps to establish credit history in America. Start off small with a credit card, and then work your way to a personal loan or auto loan. Make all of your payments on time and after two or three years you will have established some sort of credibility with a lender.

Holding a steady job with a respectable company is important to lenders as well. Try your best to maintain a job with one company, which shows you have a steady source of income. These are also two big factors lenders look at when providing home loans.

What about financing a home in another country?

Lenders typically stay within the boundaries of their home country. It is difficult to find financing for a home in another country, which is why foreigners must rely on U.S. lenders to receive financial help with the home buying process. There may be a way a lender from a foreign country may be able to purchase a home in the U.S. through a foreign lender.

A foreigner who has saved up a considerable amount of money, but not enough to actually buy a home, may be able to purchase a home with cash. Take this example into consideration; a foreigner managed to save $275,000 and wanted to buy a home for $300,000, so he or she applies for a personal loan of $25,000 from their respective country.

Let's say this person took currency exchange into account, and was able to think ahead when taking out the loan. The loan processes and goes through, and they now have $300,000 in cash to purchase a home. By taking out a personal loan to cover the rest of the cost of purchasing a home, a foreigner can buy property in the U.S.

Cash is a powerful tool when negotiating the purchase of a home.

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