In the past, getting a home loan as a foreign national has been difficult. Lenders often have a complicated task when it comes to verifying information provided by non-citizens. For example, in the U.S., we don’t use the same credit-scoring system as might be used in a different country; this disconnection between credit reporting systems can lead to difficulties getting a foreign national approved for a loan.
Proving that you are not a credit risk is more difficult for foreign nationals, and you’ll likely have to prove your employment history and proof of income, which could be challenging if you’ve only recently arrived in the U.S.
However, the key factor to getting a loan is not your residency status; it’s your income compared to your debt load. Using this principle, San Diego Purchase Loans is proud to offer assistance for foreign nationals seeking an affordable home loan.
Home Loans for Foreign Nationals: How We Can Get You Approved
With this program, you can enjoy numerous benefits that come from having an affordable home loan with reasonable terms and fair interest rates. When you work with San Diego Purchase Loans, we can help you secure a maximum loan-to-value of 70%, which is 5% more than the rest.
Loan-to-value, or LTV, is one of the most important numbers to lenders, and it essentially demonstrates the amount of the loan compared to the value of the property. For example, if you use a $900,000 loan to purchase a property worth $1,000,000, the LTV would be 90%.
Generally, lenders prefer to keep the LTV down to reduce overall financial risk, and LTV is directly tied to down payments. For example, if you have a 20% down payment, the LTV would be 80%. Therefore, if you can get higher LTV loans, you’ll be able to purchase a house with a smaller down payment. By giving foreign nationals access to 70%-LTV loans, we are creating more opportunities for buyers.
Currently, we are not requiring ITINs for these loans. ITIN stands for Individual Taxpayer Identification Number, and it’s a tax-processing identification that helps the IRS organize tax payments. The IRS issues these numbers to people who have a Social Security number. These identification numbers are issued regardless of immigration status because both resident and non-resident aliens may have U.S. tax returns and will therefore be responsible for payments to the IRS. Typically, ITINs are needed by non-resident and resident aliens filing a U.S. tax return and are not eligible for Social Security numbers. They may also be required for dependents and spouses of a U.S. citizen, resident alien, or non-resident visa holder. There are many situations that may require you to have a ITIN, but for the mortgage loans that we are offering for foreign nationals, they will not be required.
To qualify, you will need to document your income with a CPA letter of stated income, which should cover the past two years. Talk with a CPA in your area to learn about the details for this letter and how you can have one completed. You will also need to provide documentation of a business through a web listing or business license. However, when you are filing for one of these loans, you can get approved without needing tax returns, pay stubs, or a VVOE.
To get approved, you will need to provide third-party verification of income and employment.
If you are a self-employed foreign national, the way you get approved will be slightly unique. You’ll need to provide a letter, written in the company’s letterhead, that is from a professional who is based in your country of residence. The nature of the business will also need to be verified, which can be done with the assistance of an accountant, CPA, financial-institution officer, or a licensed financial advisor. This professional will need to verify the nature of the business, as well as your income figures for the past two years. They will also need to check the year-to-date income figures. Validation of the existence of the business will need to include various information, including an internet page web address or a business license that comes from a government organization.
Wage earners will also need to provide various information to the lender. First, a letter from the company (again written on the company’s letterhead) should be provided. This should relate the nature and terms of your employment and must come from an authorized representative of the employer. It should state the employment history, including job titles, time on the job, and more, as well as current monthly salary and year-to-date earnings. To complete the approval process, make sure the lender has access to valid pay stubs, pay ledger, or financial institution deposit. A transaction record that supports the employment may also be needed.
Building U.S.-Based Income May Improve Your Chances of Approval
One of the first things you can do to increase your chances of approval is to start building credit here in the United States. Establishing credit can be difficult, but once you have three sources of credit reporting and about two years of sustained credit payments, you’ll start to build a credit profile that helps you get approved for a wide range of mortgages. Some lenders will accept credit reports from your home country, but if you want to increase your options it helps to have credit right here in the United States.
Having an existing relationship with an international bank could also help. If the bank has branches in your country, as well as locations here in the United States, you may be able to establish a relationship with the bank and use their services for your loan.
Proudly Providing Home Loans for Foreign Nationals
If you are interested in getting a home loan as a foreign national, contact the team at San Diego Purchase Loans today. We’ll make sure you have the information to make the right decision for your future. No matter what your immigration status, let us help you get approved for an affordable loan on a world-class home!
“This is the second time that I have worked with Chad (home purchase & refinance). He has become my subject matter expert and someone I depend on for all finance needs related to our home and real estate investments. My favorite things about Chad are his depth of knowledge, responsiveness, honesty and the great service he provides. I have referred countless friends and family of mine to work with him for no other reason than I know that he will treat them well and equip them for the best possible outcome. Chad will add tremendous value to any real estate transaction that you have and I am grateful to have him as a resource.”
I was referred to Chad by my Realtor for a purchase of a new house. The experience with Chad and the team (I mainly worked with Juliann) was nothing short of outstanding. From start to finish there were always quick to respond and when needed, notify me of any new documentation that was required. There were very helpful explaining to me the pros and cons of different financing options as well as some other loan related issues, such as termite clearance outside the purchase contact and septic tank certification process. Overall, very knowledgeable and processional team. Loan preapproval was done in a single day and loan documents were ready for signing in 21 days, which was 9 days ahead of schedule. That never happened to me before.
I highly recommend Chad Baker. He does a phenomenal job and won’t trauma you or your clients. He has a whole team that works on the loans. And all the team members are great. He has a person that can translate for your clients that are Chinese. He is as good of a loan officer as you are an agent, and that is what you want when referring clients to a lender.