House Hunting 101: Buying A Home As An Immigrant

Real Estate Articles

For countless immigrants, buying a home has always been a part of achieving the American Dream. It's no wonder that immigrants are the fastest growing segment of home-owning households, as they're projected by the Research Institute for Housing America to account for over a third of homeowner growth by 2020.

The road to home ownership, already bumpy for many U.S. born citizens, can be even bumpier for aspiring immigrant homeowners. The following offers plenty of tips and advice for newcomers looking to purchase their own home in the United States.

Anyone Can Buy a Home

Home ownership isn't just restricted to U.S. citizens. Anyone who has the money to buy a house or any other piece of property can do just that. Even those who've entered the U.S. without the right documentation can purchase a home as long as there's an offer on the table, although doing so has the potential to introduce a variety of unforeseen complications into the picture.

There's also no residency status conferred to foreign property owners or undocumented immigrants, unlike in some other countries. This means a foreign or undocumented individual can buy as many properties as they please, but it won't provide legal residency status within the U.S.  

Solving Credit Issues

In the U.S., credit histories and scores are commonly used as the measuring stick for a person's financial health. However, many immigrants often arrive in the U.S. with no credit history for mortgage and home loan lenders to use. It can take years for a new resident to build up a credit history, making it difficult for some immigrants to purchase a house right away.

• Apply for a government loan – Government insured home loans from the Federal Housing Administration and other agencies are one option for newcomers, especially those who may not be able to afford the usual 20-percent down payment required by mortgage lenders. Immigrants are usually required to show at least two years of U.S. tax returns, along with other legal documentation.
• Get a loan from a portfolio lender – Unlike traditional mortgage lenders, portfolio lenders are easier to get, but often come with lower borrowing limits, higher interest rates and different underwriting guidelines.
• Pay cash – It's an option many newcomers exercise, not just because of how straightforward it is, but also due to cultural differences about major purchases. In many countries, the idea of taking out a mortgage for a new home isn't something that's exercised often. However, using a mortgage makes it easier to set aside that cash as an emergency reserve.

Overcoming Language Barriers

The language barrier represents another potential stumbling block for aspiring immigrant homeowners. While many U.S. immigrants are functionally fluent in English, others may not have had the opportunity to hone their language skills. When dealing with the complexities of mortgage applications and real estate deals, this lack of fluency can place an immigrant at a distinct disadvantage.

This is where having a trusted family member or friend who is fluent in English comes in. Having someone available who can translate the complex terminology into native terms can make all the difference during the home buying process. All questions and concerns should be addressed, even if they have to be translated in the process.

Always Rely on Expert Advice

It's a good idea to seek the help and expertise of a real estate agent who is experienced in dealing with international and immigrant buyers. These agents understand the ins and outs of the home buying process, giving new buyers an edge when it comes to searching and negotiating prices for a new home.

With the above tips, any immigrant can set down roots within the U.S. and fulfill their vision of the American Dream through home ownership.

11 November 2014