How to get ITIN Mortgage Home Loans in the U.S.?

Many Americans require assistance with mortgage loans that do not have a social security number. Unfortunately, many banks and lending businesses avoid dealing with the additional effort of providing tax-ID-based mortgages because it is too much work. When it comes to getting a mortgage, there are many different things that you need to consider. One of the most important decisions you will make is deciding which type of mortgage is best for you. A few different mortgages are available, but one of the most popular is the ITIN (Individual Tax Identification Number) mortgage home loan for Americans without a Social Security Number.

ITIN mortgage loans are a type of mortgage that is available to people who don’t have an SSN or Social Security Number. This type of mortgage loan is open to both US citizens and non-US citizens, and it’s an excellent option for people looking to buy a home but don’t have a social security number. Unfortunately, many mortgage lenders require an SSN to qualify for an ITIN loan. Still, there are such ITIN mortgage lenders who will help you get an individual taxpayer identification number without the need for an SSN.

In this article, we will be dealing with some pros and cons of acquiring ITIN home loans, the necessary qualifications and types of properties that fall under this particular mortgage home loan, and the complete application process of getting an ITIN home loan regardless of citizenship.

What is the ITIN Mortgage Loans program?

It is as simple as it sounds. The ITIN loan program is a type of home loan available to those who do not have their social security numbers. It is beneficial for people who are not eligible for conventional loans. As already mentioned previously in this blog, those who do not possess an SSN (social security number) can apply to receive an ITIN card. They would be able to approach mortgage lenders to help the former find a home in the USA.

If you are interested in applying for an ITIN mortgage plan, you will need to provide your ITIN number and other documentation to prove that you are eligible for this mortgage. The mortgage program for ITIN holders is not much different than other conventional loan programs. Let us walk through the step-by-step process of securing an ITIN home loan.

Qualifications for Acquiring ITIN Loans

An ITIN is used by individuals who do not have a Social Security number but may provide an Individual Tax Identification Number as an alternate form of proof of identification. The IRS (Internal Revenue Service) issues an ITIN to those required to have some identification but are not eligible to receive a Social Security number from the Social Security Administration.

Who is Eligible for an ITIN?

To qualify for an ITIN home loan, there are some basic requirements:

1. Depending on your credit score, you must have at least a minimum down payment of 15%. Accepted forms of financing are cash and gift money. But, again, the exact percentage depends on your credit score.

Many banks in America offer an ITIN program where the minimum down payment requirement is 15%. In addition, they accept tax returns, bank statements, and credit card statements as documentation for a loan.

2. You need to file at least two years’ worth of tax returns, i.e., two years of employment history under your ITIN number.

3. A minimum credit score of 600 is required but not compulsory. You can apply for ITIN with no credit score as well.

Refer to our comprehensive blog on how to apply for mortgages with a thin or no US credit history.

4. The last 30 days’ pay stubs must be submitted as evidence of employment.

5. If you are self-employed, you will need to show your bank statements instead of tax returns for the past 12 months.

What Properties are Levied Under an ITIN loan?

The ITIN loan was not always popular but has gained ground in the past few years. This could be because more and more properties are being built catered to ITIN holders. So, if you’re looking to purchase a property with an ITIN loan, it’s essential to know which type of property is available.

The following is a list of ITIN-friendly houses that does not contain an exhaustive list, but it will give you an idea of what properties qualify under ITIN mortgage loans.

1. Single-family detached homes

2. Townhouses or row houses

3. Condominiums

4. 2-4 unit residential properties

In most cases, ITIN mortgage lenders are more inclined to work with people purchasing an investment property as their primary residence. However, some mortgage lenders also consider borrowers with an ITIN for a second home purchase or a rental property.

The Application Process for ITIN Home Loans

Before jumping on to the application process for acquiring an ITIN mortgage home loan, it is imperative to understand the Individual Tax Identification Number or Tax-ID and how you get one in your possession.

What is ITIN?

An ITIN is a nine-digit number that the IRS issues to individuals who are not eligible to receive a Social Security Number (SSN). The primary purpose of an ITIN number is to assist in processing federal tax returns. An SSN is not required if you have an ITIN.

As already discussed above, The IRS issues ITINs to both resident and non-resident aliens who are required to have a US taxpayer identification number but who do not have and are not eligible to obtain an SSN from the Social Security Administration (SSA). If you need to file tax returns, you must get an ITIN.

Steps to Get an Individual Tax Identification Number or Tax-ID

Understanding in detail how to apply for ITIN mortgage home loans is crucial. It will help speed up the process once you are well-versed in all the necessary steps to be followed and will give you a quick route to fulfilling your American dream of owning an investment property.

The whole process of acquiring an ITIN loan is relatively easy to grasp, and these few steps will give you a seamless experience in receiving your ITIN loan.

Step 1: Gather all required documents

Applying for an ITIN loan requires you to fill out a form – the W-7 form. You must also have documentation for proof of identity and foreign status along with this form. These are the three basic sets of documents you will need to provide with original supporting documents or certified copies from the issuing agency. You will also need to provide a completed tax return unless you are filing Form W-7 only to apply for an ITIN, covered in the next step.

You must have one of the following ITIN loan requirements to complete your application:

1. Identification card

2. Driver’s license from the United States or your country of origin

3. Passport

4. An official birth certificate for children under 18

5. American or foreign military card

Identity Documentations

You can submit a passport (stand-alone document or card) and a national identification card (must show photo, name, current address, date of birth, and expiration date) for identity documents.

Foreign Status Documentations

You can submit a foreign birth certificate, passport, US immigration document, or US residency permit to prove alien status.

Step 2: Filing tax returns

To be able to file a tax return as an immigrant in the United States, you must first obtain an ITIN. If you need to file a tax return and do not have an ITIN, file Form W-7 with your tax return. Include original documentation or copies from the issuing agency that establish identity, foreign status, and a completed tax return.

Step 3: Submit your application

The next step is to submit your application. This can be done either through standard mail (ITIN application cannot be made online) or in person at a designated IRS Taxpayer Assistance Centre. If you are mailing your application, it is recommended that you use certified mail and get a return receipt so that you have proof of delivery. You should not submit your tax return or any other paperwork to the address given on Forms 1040, 1040A, or 1040EZ because it is only an attachment to your ITIN application.

If you are applying in person, you need to make an appointment first using the IRS toll-free number. In any Taxpayer Assistance Center, the IRS will return the ITIN application materials to you as soon as possible.

Step 4: Arrival of ITIN

The final step is to wait for your ITIN to arrive. The IRS will mail your ITIN to the address you provided on your application within 6-7 weeks from the date they received it.

Steps to Get an ITIN Home Loan Through Mortgage Lenders

Follow these steps to secure your loan through ITIN mortgage home loans.

Step 1: Budget evaluation for your home

When opting for home financing in the US, it is advised to think about the monthly payment requirement rather than the property’s purchase price, as this will be needed to pay every month. Therefore, a few pointers are to be kept in mind while applying for an ITIN loan to save and secure as much as possible:

1. Mortgage principal and interest rates

2. Real estate taxes (your monthly payment is put in escrow to pay your real estate taxes)

3. Homeowner’s insurance premiums

4. Homeowner’s association dues, if applicable

Step 2: Apply for the ITIN loans as early as possible

Pre-approval of ITIN loans will give you certainty and an estimate of how much your ITIN mortgage lenders will lend to you before you start house hunting. This way, real estate brokers can determine whether or not a buyer knows what they want from the start, giving you more credibility.

They can limit their marketing efforts to the property’s most interested buyers. It also endorses sellers’ confidence in potential customers, allowing them to take less risk with their personal properties during negotiations.

Step 3: Preparation of necessary documents for approval of ITIN loans

If you are a foreign national with an ITIN card, then, for verification of your mortgage approval, three essential things must be considered: identity verification, income statements, and evidence of assets such as stocks or savings. In addition, other documents are also required to prove that you are eligible to apply for an ITIN mortgage home loan, which is discussed in detail earlier in this blog.

Furthermore, if you are an international client, then these documents, along with the ones mentioned before, are required:

1. Copy of your passport

2. Valid US Visa

3. The complete ICR (International Credit Report) form provided by the ITIN mortgage lenders

4. 2 years’ worth of employment history along with contact information

5. 2 years’ history of residency

Step 4: Research and make an offer on your home

Upon pre-approval of your ITIN mortgage loan, the moment has now come for house hunting. The very first and essential step is to find yourself an experienced agent, one with a CIPS designation, who would be able to tackle your situation with ease and provide you with the best offers. Such offers will help you save and secure as considerably as possible. In addition, your real estate agent will help you narrow down all possible home options for you and bring forth those properties best suited to your needs.

Once you decide on which property you would like to purchase, it’s time to make an offer and draft an agreement to buy the property. At the offer letter stage, you will be asked to put in a deposit, which is a certain percentage of the purchase price of your property, to show your intent to purchase.

Step 5: Wrap up on your ITIN loan application

Once the formalities of making an offer have ended, the ITIN mortgage process begins. Two things are to be considered, i.e., settling on a down payment amount and choosing a term length. The next step is to complete any pending paperwork left, although most of it would have been covered during your mortgage approval process. Finally, the loan officer will provide you with a loan estimate, which gives you an estimate of your mortgage loan amount and closing costs within three business days of applying.

Step 6: Interest rates on ITIN loans and loan processing and underwriting

The interest rates on mortgages frequently change in the United States due to changes in the bond market. Locking your mortgage rate ensures that your interest rate remains the same until you refinance or sell your property. You should consider locking your interest rate when you accept the loan estimate.

The loan appraisal and approval process begins when you have received and signed your Loan Estimate. A loan processor helps you ensure that any necessary documentation is included in your loan file’s submission to the underwriter. During the underwriting process, an underwriter verifies your income, assets, job status, and other information to decide whether or not to accept or reject your mortgage application.

Step 7: Property appraisal and closing disclosure

During the underwriting process, your lender will look at a real estate appraiser’s home appraisal report, which the lender commissioned. An appraisal protects both the buyer and the lender by ensuring that the property is worth the agreed-upon price.

Once the underwriting process is complete, your loan officer should give you a copy of the Closing Disclosure 3 days before signing the mortgage loan documents at your closing. Other documents required are your photo ID, a copy of your Closing Disclosure, and other paperwork and necessary funds.

Refer to our detailed blog on the US mortgage process and mortgage closing process.

Conclusion

The USA is a place that offers opportunities for everyone and tries to make every individual feel at home. They have different options for people with various situations, and such people who specialize in these areas assist anyone, be it a foreign national, resident alien, or non-resident alien.

In this blog, we have shared information on ITIN home loans and given a detailed section dedicated to the application process to make it a smooth experience for you to start your journey in the US!

Frequently Asked Questions (FAQs)

Is ITIN the same as SSN?

The IRS assigns the Individual Taxpayer Identification Number for individuals incapable of acquiring a Social Security Number, which the Social Security Administration sets. The two are not the same.

We have discussed the various qualifications for applying for an ITIN loan, and a detailed application process has also been mentioned for acquiring an ITIN loan.

Can I get an SSN if I have an ITIN?

Yes, you can get an SSN if you have an ITIN. However, the reverse is not possible as an essential requirement for receiving an ITIN is the inability to obtain an SSN.

Can I work legally with an ITIN?

An ITIN is not a form of legal immigration status and cannot be used to demonstrate legal residency in the United States. In addition, an ITIN does not provide employment authorization and cannot be used to establish work authorization.

Can you buy a house with an ITIN number?

You can have complete homeownership with an ITIN number. This article showcased the various steps involved in applying for ITIN and the basic qualifications you need to receive an ITIN to help you purchase a property in the US. In addition, although most lending institutions have a preference to offer loans to individuals with an SSN, such lenders also exist who specialize in helping you acquire loans with ITIN.

How can I get a loan without Social Security Number?

You do not need an SSN, even if you are a migrant without one, to establish a checking or loan account or apply for a personal loan. However, you need an ITIN (Individual Tax Identification Number) to open a bank account or seek a personal loan. You can get an ITIN if you are paying federal taxes. The complete application process is provided earlier in this blog.