ITIN Home Loans: Get a Mortgage Without a Social Security Number (SSN)

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If you are a foreign national living in the United States, you might want to buy a home you can call your own. Without a social security number, though, you might think that you are out of luck.

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We have some good news for you. An SSN might not be necessary to get the loan approval you desire. What you do need, without a doubt, is an ITIN. Beyond that, you will have to meet certain requirements in order to qualify, just as you would if you had a social security number.

Keep reading to learn the requirements you must meet to buy the home you want to live in the United States.

Build up a Credit Score

Lenders need to know your level of financial responsibility. They do this with your credit score. Don’t worry if you only have an ITIN, there are ways to get credit even without a social security number.

Start small and apply for a secured credit card. Many credit card companies offer this type of credit card because it carries little risk. Your credit line is equal to the amount of your down payment. That’s where the ‘secured’ part comes from. If you default on your payments, the credit card company keeps your deposit. They don’t lose any money and you got the chance to build up your credit. Of course, it’s best if you make your payments so that the credit card company can report your payments as made on time and help you get a credit score.

Once you establish a history with a secured credit card, you can start applying for other types of credit, such as unsecured credit cards. You can also apply for installment loans or personal loans with lenders. Whatever type of credit you take out, make sure you pay it back as scheduled and pay off any credit card debt in full or as close to full as possible.

Use Your Alternative Credit Options

If you can’t or don’t want to get credit cards, you may be able to get an ITIN loan with alternative credit. If you pay things like:

  • Rent
  • Tuition
  • Utilities
  • Insurance

You can use the payment histories from these accounts to show that you are a good risk. Lenders usually want to use between 12 and 24 months of a history on alternative accounts. This lets them know that you stay current on your liabilities and show financial responsibility.

Keep Stable Employment

Employment is another key factor in any loan approval, including the ITIN mortgage. In this case, it’s best if you have a solid 24-month history with the same employer. This shows lenders that you are a stable person that they can rely on if they provide you with a loan.

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Even if you have stable employment, though, you will also have to prove the future of your employment. While no one can predict the future, lenders want to know that you will stay in the United States for at least the next few years. If you will be out of a job because your contract ends in less than three years, it could make it harder to get an approval for a mortgage without a social security number.

Down Payment Money and Reserves

Since you pose a higher risk for lenders because you don’t have an SSN, lenders will likely require a higher down payment from you. Just how much they require depends on the loan program and your other qualifying factors.

Before you just show up with money in your hand to put down on a home, though, you have to prove where it originated. The best way to do this is to open a bank account and make regular deposits. If you can, have your employer deposit your paycheck directly into your account every payday. If you do this for 12 to 24 months, it will show the lender where your money comes from as well as its consistency.

The key is to have your funds seasoned. Just how long they must be in your account varies by lender and the chosen program. The longer the money is in your account, the better your chances of approval. In other words, you can’t have a large deposit come out of nowhere and you be unable to prove its origination. Lenders need to make sure beyond a reasonable doubt that the money you have did not come from a loan.

Just how much money you will need depends on the program. In general, expect the following:

  • At least a 20% down payment – ITIN mortgages are risky, so lenders often want a high down payment to offset that risk. You may be able to shop around and find lower requirements, but 20% is average.
  • At least 6 months of reserves – Money you have on hand to pay your mortgage should your income stop is reserves. Lenders measure the amount you have based on the total amount of assets available after your down payment and closing costs divided by your monthly payment. For example, if you have $10,000 and your mortgage payment is $1,000, you have 10 months of reserves.
  • Enough to cover the closing costs – Your closing costs could be anywhere from 2% to 5% of your loan balance, so make sure you have enough cash to cover them as well.

Making up for the Risk

Because a mortgage without a social security number is risky, lenders often look for compensating factors. You need to be able to prove to lenders that you are a good risk. You can do this by offering a higher down payment than required, having stable income and a good credit score, or by having reserves on hand.

It is possible to get an ITIN mortgage, it just may take a little more work than the traditional loan. Lenders need to make sure beyond a reasonable doubt that you can afford the loan. It’s your job to prove that you can.

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