1 Identify Yourself
To buy a house, be prepared to prove who you are.
Although you do not need to be a US citizen or resident of the United States or have a green card, you must obtain an Individual Taxpayer Identification Number (ITIN) which corresponds to an individual identification number taxpayer.
This is a number assigned by the Internal Revenue Service to foreign nationals who are not eligible for a Social Security number (Social Security Number) and must file tax returns once the acquisition of a Property conducted on US territory.
An ITIN can be issued by the Internal Revenue Service or an authorized professional accountant approved by the IRS. You will have to complete a W-7 form (in English) or a Form W-7 (SP) (in Spanish) to request your ITIN. On the Form W-7, you will be required to give a reason for your application.
Depending on your nationality, you will also need a valid foreign passport, a visa, or two or more current photo identifications such as a driver’s license to verify who you are and your country of origin.
2 Financing and loans
Qualified foreign buyers can generally obtain financing from US banks for the purchase of a property in the United States provided a deposit of 30% to 40% of the amount of the acquisition.
Banks in the US are happy to provide loans to foreign buyers, but they usually require a promise of extending the customer relationship beyond the loan.
Many banks require a specific minimum amount of deposit in their accounts (minimum $ 100,000) and others set loan limits of $ 1 million to $ 2 million.
You may also be required to present a minimum of three months of bank statements and some banks also often want to obtain evidence of sufficient reserves equivalent to at least 12 months of coverage of mortgage payment, maintenance and taxes in addition to the deposit of $ 100,000 mentioned above.
Before applying for a U.S. mortgage, you must first establish credit and earn a good credit score. You can start building your credit score by opening U.S. bank and credit card accounts. You’ll also want to be sure to report all income on your tax returns. Lenders use this income information to determine how much money they’re willing to loan you to buy a home.
Stephan Illouz and Coldwell Banker Residential Brokerage have relationships with all the major banks in Los Angeles that grant housing loans to foreign investors, and we can help you find a lender and mortgage terms that best suit your needs.
Of course, you will probably not need financing.
Do not hesitate to contact me if you want more details on the different options and possibilities for financing a property purchase in Los Angeles.
3 Mandatory Documents for the acquisition of real estate in the US
International buyers are usually asked to provide the following documents:
– Credit References
Usually at least four references from credit sources will be required for mortgage loan applications. These documents must come from financial professionals such as accountants, bankers, and insurers. These letters should always be written in English.
The letter of reference from your main bank must mention and confirm that you have in your bank account the sum you want to invest.
This is very important – in 2012, real estate agents in the United States indicated that most of the transactions that failed with foreign buyers were due to the fact that buyers were not adequate credit history.
– Appropriate Visa or Passport Copy
– Verification of Rent / Mortgage payments (for last 12 months)
– Proof of regular income / employment
International buyers, just like US buyers, will be asked to verify their employment when applying for a mortgage.
– Adequate Closure Fund
You will need to show that you can afford the purchase of the property and that you have sufficient funds on reserve to cover the first full year of credit payments, insurance fees, taxes, etc.
– Insurance
Every US lender requires borrowers to purchase homeowners insurance to protect the home from any potential damage and natural disasters.
Insurance costs vary depending on the size of the property and the state in which it is located. The costs tend to be significantly higher in states prone to natural disasters, such as Florida and Texas.