Want to get your own American home? Here’s an in-depth guide to buying property in the US as an expat, how you can qualify for a mortgage there, and what options you have for transferring money from overseas.
22. Juni 2021 — 14 min read
If you’re planning on moving to the United States, does your American dream include having your own home there?
In case it does, you’ll be happy to know that you have a variety of options to choose from, especially if you’ll be living in the US for more than a couple of years.
However, the process can get thornier than you imagined, especially when you’re new to the country and haven’t built an American credit history yet. To help you avoid a mess, we’ve prepared this guide to buying property in the US as an expat. We’ll cover the ways of looking for a property in the country, the steps for setting up a mortgage there, and how you can transfer money to the US from abroad.
Is your property close enough to shops and restaurants, so you can walk or bike the distance? Are there any attractions or parks nearby? How far is your new property from town?
Are you looking for a property with a garden, or a wide enough space for pets and kids? Or would you be okay with a small yard? Consider whether you need a lot of outdoor space, and search for properties in the US accordingly.
Whether your property in the US is turn-key (ready for you to move in) or an old one, you should never buy it without assessing its condition first. You can hire a property inspector to check if your home has any issues and needs repairs.
Major issues like uneven floors, a damaged roof, and plumbing issues are red flags, since these can cost you thousands of dollars to replace or repair.
In case your property area is ever hit by a flood, you have to be prepared beforehand. If your new home in the US is located in a high-risk flood zone, you’ll need to make sure your home has special insurance coverage.
Take into account your current situation and future plans while deciding on the number of rooms your property should have.
If you plan on working from home, for example, think about how much space you’ll need to serve as your office.
You might also want a few extra bedrooms for visitors or any future kids, or simply a separate suite for your parents, if you’re moving to the US with them.
To give you a head start, here are some resources you can resort to:
With a huge database of more than 100 million properties in the US, Zillow has published volumes of “how-to” guides about buying homes in the country. Both the Zillow app and the website refresh every 15 minutes or so, keeping you updated with changes in the property status, if any.
Using the app, you can search for apartments and homes, save and share your searches, and access pictures and videos of the property when available - all for free.
The best thing about using Zillow is their extensive and hyper-focused criteria sorting feature. Like, you can search for homes not only based on the property type (townhouses, manufactured homes, houses, or condos), the price range, and the number of bedrooms and bathrooms, but also with filters for square footage, views, and facilities like air conditioning.
The more filters you use to zero in on the exact properties you want to buy, the more fine-tuned other property recommendations become.
You may not find a specific feature on Zillow’s criteria list (say, a fireplace), but you can enter the desired feature in the search bar to hone your property search based on that feature.
Every time a home you saved is sold or drops in price, or new property listings in the US hit the market, you’ll receive email alerts from Zillow.
A unique tool on Zillow is the Zestimate, which collects data from different property listing services and brokerages, as well as from tax assessor records, to estimate the market value of a property.
You can check the median Zestimate of properties in your desired ZIP code area, too, and get information about a specific neighborhood, like whether it’s car-dependent or walkable, or whether property values are expected to rise or fall there in the near future.
Zillow also offers 3D Home tours, letting you experience a home virtually. So if you don’t have the time to put into in-person home tours, Zillow’s got your back.
Redfin is a well-known real estate brokerage based out of Seattle. Searching across Redfin property listings is a breeze, especially as it uses robust browsing filters to narrow down your property search results.
Unlike the other property websites and apps we’ve touched on in this list, Redfin lets you connect with real estate agents if you have any questions, or you want to schedule virtual or in-person tours.
You can even save and track the list of properties in the US you’ve recently toured, and save upcoming open houses in your desired area to your in-app calendar.
An immensely transparent property listing app in the US, Trulia is a lot like Zillow in terms of featuring tutorial guides and sending you personalized alerts based on your property search criteria. You’ll also have local information from multiple map views at your fingertips.
In short, Trulia can show you each property in the US plotted on a map, where you’ll be able to check the crime rate in the area of the property, schools, places to eat and shop, and stats related to the people there.
You can even go through neighborhood reviews given by people who live in the area where you’re searching for a property.
So, in case you’re more of a people person than a loner, Trulia helps you understand the basic characteristics of your potential neighborhood, such as what you might or might not like about the area and the people there.
What makes Realtor.com one of the most reliable property listing websites for expats in the US is its affiliation with the National Association of Realtors.
It also updates property listings real-time. So you can trust this portal to not mislead you when it comes to the property status (whether it’s on sale or has already been sold) and the home value.
Like the other real estate websites we’ve mentioned above, Realtor.com lets you see pictures of the property and enjoy video tours, but the best part is that you can even take into account neighborhood criteria such as noise levels.
The app allows you to run financial calculators and reach out to realtors, as well, so it’s almost an all-in-one service.
Hire a local agent who’s going to serve on your plate American properties in areas matching your lifestyle and your budget.
He/she/they can create a list of all suitable properties, and arrange viewing tours on all of them for you to see.
You may not know it, but Facebook and Snapchat are great places for expats to start looking for a property in the US.
You’ll find numerous property-related groups (both public and private) on Facebook itself, where realtors, property sellers, and other people keep updating the group members about new properties on sale.
They might mention the size of the property, the location, facts and features of the building (like floors, walls, and windows), and travel routes. And if they also post pictures of the property, it’s a huge plus.
To get the actual feel of the house and the neighborhood where you want to buy a property as an expat, plan a long in-person house-viewing tour.
On this tour, you can check out the areas and homes you think will be a good fit for your lifestyle and your wants. You may also have this tour include hunting for homes and other properties you’ve found online.
Buying a home in the US with a mortgage isn’t impossible, but it can be tricky, especially when you’re an expat.
Here’s what you need to know as an expat to qualify for a US mortgage.
A valid foreign passport, a driver’s license, or a current US visa
Proof of your existing income and employment, if any
Your Social Security Number (SSN), if you’ve got one
Your Individual Taxpayer Identification Number (ITIN), a tax processing number if you can’t get an SSN
At least 2 months’ worth of bank statements, where applicable
Some of your recent payroll stubs
Proof of rent payment for the last 12 months (if you’re a renter)
Proof of student loan payments (if you’d taken any student loan)
Your US credit score (a minimum of 750 to 780 would do)
Some lenders may require you to have worked or lived in the US for at least 2 years
A minimum of 20% down payment
Simply meeting a number of the criteria we’ve mentioned above doesn’t guarantee you’ll qualify for a US mortgage as an expat.
Some lenders may provide mortgages to expats at higher interest rates, while others may not, at all.
It’s easier to qualify for a mortgage in the US (like Fannie Mae loans) if you’re a permanent resident with a green card, or a temporary resident on a valid work visa.
Generally, lenders accept the following types of visas for mortgage applications in the US:
E1 and E2 visas (if you move to the US under a commerce and navigation treaty between the US and your country of origin)
G1-G4 visas (if you’re an employee, diplomat, or a government official working for international organizations in the US)
H category visas (H1B for specialty occupational service providers, H2A for temporary agricultural workers, H2B for temporary non-agricultural workers, and H3 for temporary trainees)
L1 visas (L1A for executives or managers who have been transferred within a company, and L1B for temporary transferees, within a company, working in positions that demand specialized knowledge)
Secondly, you’re not likely to get a mortgage in the US if you’re buying a co-op.
That’s because co-ops are meant to be permanent residences, and lenders may think you can easily relocate to your home country, making it difficult for the lender to track you down overseas. Additionally, it’s difficult to get a mortgage on a co-op because you technically won’t own a co-op. You would need a co-op loan or a share loan, which is a loan to own shares in the cooperative. However, it can be difficult to find a lender to give you that type of loan.
So, buying individual homes or condos would likely be a safer bet.
Lenders usually require US citizens to make a down payment of as low as 3% to 5% of the property purchase price. But for expats, the minimum down payment is increased to a whopping 20%, if not 30%.
If you have all that cash stacked up in your bank account overseas, how do you propose to send money so you can make the down payment in the US?
With Xe, you can not only transfer money to the US online (across different currencies) from Australia, Canada, the UK, New Zealand, and Europe, but you can also send money from the US to over 130 countries.
Xe does all that work for you at cost-effective exchange rates, so you don’t have to worry about the otherwise hefty fees and unfavorable rates you may have to face if you had chosen a wire transfer or a bank transfer.
If you don’t have a payment to make at the moment, you can still monitor your choice currencies and keep an eye on the markets. You can check the live exchange rates for any currency, and set rate alerts to notify you when a currency pair reaches your desired rate.
If you haven’t been in the US for long, you might not have a credit report from TransUnion, Equifax, and other major credit bureaus in the country.
And lenders would need your US credit report and score to assess your risk profile. What then?
You’ll get a step ahead if you have an account with an international bank that has branches in the US. They might be willing to offer you a mortgage or home loan, as they’ll already have a record of your finances.
You may also find some lenders who are ready to order International Credit Reports (ICRs), to replace reports by the major US credit bureaus.
You’re not likely to have a credit score if you’ve moved to the US only recently. To get a mortgage or a home loan as an expat in the US, though, you’d need to build up your credit score by establishing a good credit history.
For starters, open a US bank account and obtain a credit card. Always make sure to pay your credit card bills on time and in full every month, along with each of your utility bills, like electricity, Internet, and mobile phone bills.
Building up your credit record from scratch will take time, so incorporate at least 3 to 6 months (or more) into the plan.
You can also reach out to your local bank in the US and ask them about any tools and options that will help you earn a high credit rating.
Lenders in the US typically offer fixed rate and Adjustable Rate Mortgages (ARMs) to expats.
With a fixed rate mortgage, you can be sure that the same interest rate will apply throughout the duration of the agreement.
ARMs, on the other hand, are variable rate mortgages, meaning that the interest rates keep changing.
Although there are several traditional and online banks in the US, along with credit unions, many of them steer clear of expats when it comes to providing home loans or mortgages.
There are some banks, though, that frequently deal with expats in the country. One of these is HSBC Bank, offering US mortgages specifically designed for expats, but subject to certain conditions.
For example, with their HSBC Preferred Mortgage, you can access a maximum of $3 million USD in financing primary residences and second homes, at a 30-year fixed interest rate of 3.279%.
However, you can apply for this loan only if your personal deposit and investment balance at HSBC ranges from $10,000 USD to $74,999 USD.
HSBC even orders an ICR for you, so you don’t require a US credit history to apply for their mortgage.
You’ll also find other mortgage companies and credit unions offering Federal Housing Administration (FHA) home loans to expats, once they verify their residency status, financial record, and work history.
When you’re sure you want to buy a property in the US after shifting there, get together a professional team, including a real estate attorney, a tax advisor, a US-based financial advisor, and a buyer’s agent with a designation from the Certified International Property Specialists (CIPS).
Compare mortgage rates and options, and check how much you’ll need to pour into monthly payments to set your property-buying budget.
Get pre-qualified for a mortgage and start house-hunting.
After finding a property you like, order a home inspection, and make an offer to the seller.
Apply for a mortgage after the seller accepts your offer.
Secure the sale by paying your deposit
Once you get the final mortgage approval from the lender, schedule your closing and sign all the necessary documents.
Buying a property in the US as an expat can be quite daunting, we understand. But with some research and help from the experts, you might be able to find the perfect deal that works for you.
The content within this article has been provided for general information purposes only. This content does not take into account individual financial situations, needs, and goals, and should not be used as financial advice. Information within the content is subject to change from the time it was published.