There’s no place like home! When it comes to life’s milestones, purchasing a home sits at the top of the list. While it remains a significant achievement for any individual or family, buying a home can seem particularly daunting for immigrants in the United States.
With careful planning and foresight, however, you’ll be able to build a strategy that makes owning a home a reality.
Here are six quick tips to put you on the best path to owning a home here in the U.S.:
Set Your Spending Limit
“How much can you afford to spend?” This part may seem obvious, but it’s the most important question to ask before starting the home-buying process.
The general rule suggests prospective home buyers look for homes within the total value of 3 times their annual income. Because most people don’t have the required amount of cash available to buy a home, the vast majority of home buyers—native-born and immigrants alike—will need to secure a mortgage to finance their purchase.
Before we show you how to start the mortgage process, it’s essential that you first know your rights as an immigrant.
Know Your Rights
While it can seem difficult for immigrants to buy a home, the government enforces various agencies and laws to work on your behalf. These include the U.S. Department of Housing and Urban Development agency (HUD) and The Fair Housing Act (FHA), a national law that makes it illegal for housing providers to discriminate against buyers.
As the HUD declares, “Housing discrimination is not only illegal, it contradicts in every way the principles of freedom and opportunity we treasure as Americans. HUD is committed to ensuring that everyone is treated equally when searching for a place to call home.”
Owning a home is anchored in the American Dream, and that dream extends to all people.
Secure A Mortgage
Mortgage lenders will first look at your U.S. credit history to assess your eligibility for a mortgage loan. If you’ve recently arrived in the United States, it may take some time to build up your U.S. based credit history.
Start the process by opening a U.S. bank and credit card account. Credit scores are ranked between 300 and 850: the higher the better. Check out CreditKarma to run a check on your current score. Ensure that you report all of your income on your tax returns, as lenders will use these returns to determine how much you can afford to purchase.
Once you are in a position to secure a mortgage, be strategic with how you approach the process. Never settle for the first offer. Speak with multiple lenders to ensure you get the absolute best deal available. Compare rates, loan terms, and lender fees so that you can make an educated decision.
While a 20% down payment is often considered “standard” (and will help you avoid paying private mortgage insurance), it is not a fixed requirement. According to the National Association of Realtors, the median down payment on a home purchase is actually closer to 12%.
Protect your savings by deciding what options work best for your financial situation.
Find the Right Real Estate Agent
It’s crucial to work with a real estate agent who understands you, your family, and your specific needs.
In a perfect world, you will be able to work with realtors who are experienced in assisting foreign buyers. If you are not fluent in English, you must find an agent who has a command of your native language.
Finding the right real estate agent is essential to finding the right home. They will act as your liaison to finding the perfect home and neighborhood while guiding you through the process, paperwork, closing costs and more.
Shop for a Home
With a real estate agent on your team, you can now start looking for a home! While the process may feel overwhelming, you can ease your anxiety by creating a specific “needs and wants” list.
Make a chart of essential features that answer foundational questions including:
- How many bedrooms and bathrooms do I need?
- Do I want more yard space or square footage?
- What kind of neighborhood do I want?
The more specific you make your goals, the more efficient you’ll be throughout the buying process.
Make an Offer
You’ve finally found your dream home. Now what?
The time has come to make an offer. While the listed price suggests a specific number, most home purchases are usually meted out through negotiation. Make your offer and expect the seller to deliver their own.
Depending on the market, you will likely have a back-and-forth negotiation process until an agreement is reached.
In addition to negotiating the asking price of the home, also consider negotiating the homebuyer rebate—also known as commission rebate. While some states prohibit homebuyer rebates, ask if your agent is willing to forego this fee to help you save money.
Buying a home will be an unforgettable moment in your life and provide a space to welcome family and friends.
To get started, check out the U.S. Department of Housing and Urban Development website to discover programs that can help you purchase a home, obtain homeownership vouchers, and much more.
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