Everyone needs a home abroad to make their stay a lot more comfortable. For some foreigners, they would rather find a home they can rent or buy instead of rent a room in a hotel. This is especially true if you have the funds and the right papers.
But when it comes to making the decision, many are unsure whether to buy a home or rent instead. Both options have their own fair share of perks and drawbacks. The good news is, even non-U.S. citizens can choose between these two options provided you have the right requirements.
Questions to Ask Yourself Before Making a Choice
There are questions you need to answer when choosing between a home purchase or renting in a foreign country. Answering the right questions will make it easier for you to draw a decision. Here are some of the most important things you need to ask yourself first.
What Are My Long-term Plans?
Some foreigners are in the U.S. to work, study, or retire. If this sounds like your plan, then you can consider buying a property than simply renting a place. Just make sure you are prepared for the financial consequences of a home purchase as well as the pressure of selling the property before you leave the country.
If you only have plans to stay for a short while and have no intention to return any time soon, then you are better off renting a place instead. One exemption is if you plan on buying a property you can rent out to other people. You will need to consider who will be in charge of your property once you leave the U.S.
What Are the Local Laws and Regulations?
Local laws and ordinances can be intimidating for both foreigners and citizens in the U.S. Since a home is a huge investment, you want to make sure you know everything there is to know about renting or buying a property as a non-citizen. This will save you money and headache in case something goes wrong in the future.
How Will I Finance a Property Sale?
Not everyone has millions of dollars sitting in their bank account. Chances are, you will need to find a lender who will approve your mortgage to make the home purchase a possibility. Thankfully, even foreign-born individuals can apply for a mortgage.
Like all borrowers, non-residents are required to submit the necessary requirements to verify their capability to pay off the loan. The process is fairly the same among citizens and non-citizens. Remember that your residency status is one thing that can set your mortgage application process different from that of a U.S. citizen.
It is crucial that you do your research to determine your home financing options. For one, many non-citizens would apply for a Federal Housing Administration (FHA) home loan when making a home purchase. This is since the FHA offer low down payments and accepts low credit score holders.
What You Will Need to Rent or Buy a House
As a non-U.S. resident wanting to rent a property, you will need to provide a deposit, proof of immigration status, and proof of income. Your employment history is crucial as landlords will want to make sure you have a stable source of income to pay your monthly rent. As a general rule, your rent should be at 30% of your monthly income.
Know that landlords are not allowed to refuse your rent just because of your citizenship alone. Even renters are protected by the Fair Housing Act. But it is still best that you demonstrate your residency status for your landlord’s peace of mind.
When buying a house with a mortgage, you get a bigger chance of approval if you have a green card or a valid work visa. The credit score requirements will depend on the type of mortgage you are applying for. You will need to provide your credit reports within the U.S., a valid Social Security number, an Individual Tax Identification Number, proof of assets, and Identification Cards like your passport.
The home buying process for non-residents is almost the same with citizens. If you plan for a home purchase, your best bet is to talk to professionals who specialize in your case. This includes mortgage lenders, real estate agents, and an immigration attorney just to be sure you understand how it works.
Your future plans, immigration status, and financial status are among the number of things that can determine whether you are eligible to buy a house in the U.S. or not. Making the decision to rent or buy can be tricky no matter your time of residency. This is why it pays to know every detail before you decide. Based on your current situation, does it makes sense to rent a place, or is it better to make a home purchase now?