Mortgage Options as a Visa or Green Card Holder

Buying a home is an exciting milestone, but if you are on a visa or have a green card, you may wonder how your immigration status impacts your mortgage options. The good news is that many lenders offer home loans to non-citizens, though the process may involve additional requirements. Understanding your options can help you navigate the path to homeownership with confidence.

Mortgage Options for Green Card and Visa Holders
Lenders generally categorize non-citizen applicants into two main groups: lawful permanent residents (green card holders) and non-permanent residents (visa holders). Each category has different requirements and eligibility considerations.

Home Loans for Green Card Holders
If you hold a green card (Permanent Resident Card), you are typically treated the same as a U.S. citizen when applying for a mortgage. This means you can qualify for conventional loans, FHA loans, VA loans (if you meet military service requirements), and other standard mortgage programs. Key benefits include:

  • Access to conventional loans with competitive interest rates
  • Eligibility for government-backed loans such as FHA, VA, and USDA loans
  • No additional restrictions on down payment or loan terms
  • Ability to qualify for down payment assistance programs, depending on location

To apply, you will need to provide proof of residency, such as a valid green card and Social Security number, along with the standard mortgage application documents like income verification, employment history, and credit information.

Mortgage Options for Visa Holders
If you are a non-permanent resident with a valid work visa, you may still qualify for a mortgage, though the process can be more complex. Many lenders offer home loans to visa holders under certain conditions. Some of the most commonly accepted visas include:

  • H-1B (Specialty Occupations)
  • L-1 (Intra-Company Transfer)
  • O-1 (Individuals with Extraordinary Ability)
  • E-2 (Investor Visa)
  • TN (For Canadian and Mexican Professionals under NAFTA/USMCA)

Lenders typically look for the following when approving a mortgage for visa holders:

  • Stable Employment History: A steady job with a U.S.-based employer increases approval chances.
  • Valid Visa Status: Your visa should have a reasonable amount of time left before expiration. Some lenders require at least one or two years remaining on your visa.
  • Credit History: A U.S. credit history with a good credit score is important. If you are new to the U.S., alternative credit sources may be considered.
  • Down Payment: Some lenders may require a larger down payment (typically 20% or more) for visa holders compared to permanent residents or citizens.

Key Challenges and Considerations
While it is possible to get a mortgage as a non-citizen, there are additional factors to keep in mind:

  • Residency Status Changes: If your visa expires or you change jobs, it could impact your ability to continue making mortgage payments. Some lenders may require confirmation of intent to stay in the U.S. long-term.
  • Higher Interest Rates or Larger Down Payments: Depending on your specific circumstances, you may face slightly higher rates or be required to put down a larger deposit.
  • FHA and Conventional Loan Restrictions: FHA loans are available to non-permanent residents, but you must prove your intent to stay in the U.S. and have a valid Social Security number. Some conventional loan programs may have additional conditions.
  • Alternative Loan Options: If you do not meet standard mortgage criteria, some lenders offer foreign national loans, which require higher down payments but do not always require a U.S. credit history.

Steps to Secure a Mortgage as a Non-Citizen
If you are a green card or visa holder looking to buy a home, here are some steps to improve your chances of mortgage approval:

  1. Build Your Credit Score: If you are new to the U.S., open a credit card, pay bills on time, and establish a strong credit history.
  2. Gather Key Documents: Have your visa, green card, or work authorization
  3. Save for a Down Payment: The larger your down payment, the better your loan terms may be. Some visa holders may need at least 20% down.
  4. Work with a Lender Experienced in Non-Citizen Mortgages: A lender familiar with visa and green card holder loans can guide you through the process.
  5. Get Pre-Approved: A pre-approval letter will show sellers that you are a serious buyer and help you understand your budget.

Owning a home in the U.S. is achievable, even as a visa or green card holder. By understanding your mortgage options and preparing in advance, you can take the right steps toward homeownership with confidence.

Can I Roll Closing Costs Into My Mortgage to Reduce My Upfront Expenses?

Buying a home is an exciting milestone, but it also comes with a range of upfront costs that can add up quickly. One of the biggest financial concerns for many homebuyers is closing costs. These expenses, which typically range from 2 to 5 percent of the home’s purchase price, can put a strain on your budget. If you are wondering whether you can roll your closing costs into your mortgage to reduce your upfront expenses, the answer depends on the type of loan you are using and your lender’s guidelines.

Understanding your options can help you make the best financial decision while keeping your home purchase affordable.

What Are Closing Costs?
Closing costs are the fees and expenses required to finalize your home purchase. They include charges for services such as loan origination, appraisal, title insurance, and escrow fees. While some costs are negotiable, most are necessary to complete the transaction. Common closing costs include:

  • Loan Origination Fees – Charged by the lender for processing the mortgage application.
  • Appraisal Fees – Paid to a professional appraiser to determine the home’s market value.
  • Title Insurance – Protects against potential ownership disputes or legal claims.
  • Escrow and Prepaid Costs – Includes homeowners insurance, property taxes, and prepaid interest.
  • Attorney Fees – In some states, an attorney is required to handle the closing process.

These costs can add up quickly, making it difficult for some buyers to come up with the necessary funds upfront.

Can Closing Costs Be Rolled Into a Mortgage?
In some cases, you can roll closing costs into your mortgage to reduce your out-of-pocket expenses. However, this depends on the type of loan you are using and whether your home’s value can support the increased loan amount.

Rolling Closing Costs into a Purchase Loan
For conventional, FHA, and VA loans, rolling closing costs into the mortgage is generally not allowed. Lenders set loan limits based on the appraised value of the home or the purchase price, whichever is lower. This means that closing costs must usually be paid separately and cannot be added to the loan amount.

However, there are alternatives to reduce upfront costs, such as:

  • Lender Credits – Some lenders offer credits in exchange for a slightly higher interest rate, reducing your upfront costs.
  • Seller Concessions – The seller may agree to cover some or all of the closing costs as part of the negotiation.
  • Down Payment Assistance Programs – Some local and state programs offer grants or low-interest loans to help with closing costs.

Rolling Closing Costs into a Refinance Loan
If you are refinancing your home, rolling closing costs into the loan is much more common. In a rate-and-term refinance, lenders often allow closing costs to be included in the new loan balance as long as the total loan amount does not exceed the home’s appraised value. This option helps borrowers refinance without needing a large upfront payment.

For a cash-out refinance, closing costs are typically included in the new loan, as the borrower is taking out additional equity from the home. However, this results in a higher loan balance and potentially higher monthly payments.

Pros and Cons of Rolling Closing Costs into Your Mortgage
While rolling closing costs into your mortgage can reduce your upfront expenses, it is important to weigh the advantages and disadvantages.

Pros

  • Reduces Immediate Out-of-Pocket Costs – Helps buyers who may not have enough cash saved for both the down payment and closing costs.
  • Keeps More Cash on Hand – Allows buyers to reserve savings for home improvements, moving expenses, or emergency funds.
  • Simplifies the Homebuying Process – Avoids the stress of coming up with additional funds at closing.
    Cons
  • Higher Loan Balance – Increases the total amount borrowed, leading to higher monthly payments and more interest paid over time.
  • Potential for a Higher Interest Rate – If lender credits are used, the interest rate may be slightly higher than a loan with full upfront closing costs.
  • Limited Options for Purchase Loans – Most purchase loans do not allow closing costs to be added directly to the loan amount.

Alternatives to Cover Closing Costs
If rolling closing costs into your mortgage is not an option, there are other ways to reduce upfront expenses:

  • Negotiate with the Seller – Ask the seller to cover part of the closing costs, especially in a buyer’s market.
  • Choose a No-Closing-Cost Mortgage – Some lenders offer a no-closing-cost option in exchange for a slightly higher interest rate.
  • Use Gift Funds – Many loan programs allow buyers to use gift funds from family members to cover closing costs.
  • Look for Assistance Programs – Many state and local programs offer financial assistance for homebuyers struggling with upfront costs.

Is Rolling Closing Costs into Your Mortgage the Right Choice?
Deciding whether to roll closing costs into your mortgage depends on your financial situation and long-term goals. If keeping upfront costs low is a priority, exploring lender credits, seller contributions, or assistance programs may be a better solution. However, if you are refinancing and have enough home equity, rolling closing costs into your loan can be a convenient way to avoid out-of-pocket expenses.

Before making a decision, speak with a mortgage professional to review your options and determine the best approach based on your financial needs. Every borrower’s situation is different, and understanding how closing costs impact your overall mortgage can help you make an informed choice.

Should You Use a 401(k) for a Down Payment?

Buying a home is a major financial milestone, and saving for a down payment can be one of the biggest challenges. If you’re struggling to gather the necessary funds, you might be considering using your 401(k) retirement savings to cover the cost. While this option is available, it’s essential to weigh the potential benefits and risks before making a decision.

How Can You Use a 401(k) for a Down Payment?
There are two primary ways to access funds from your 401(k) for a home purchase:

401(k) Loan
A 401(k) loan allows you to borrow money from your retirement savings and pay it back over time, usually with interest. Here’s how it works:

  • You can typically borrow up to 50 percent of your vested balance, with a maximum of $50,000.
  • The repayment term is usually five years, but some plans offer extended terms for home purchases.
  • Interest rates are generally low since you’re paying the interest back to yourself.
  • Payments are made through automatic payroll deductions.

Pros of a 401(k) Loan:

  • No impact on your credit score since it’s not a traditional loan.
  • Lower interest rates than personal loans or credit cards.
  • You repay yourself rather than a lender.

Cons of a 401(k) Loan:

  • If you leave your job, the loan may become due in full within a short period (usually 60 to 90 days).
  • Reduces your retirement savings and potential investment growth.
  • Loan payments are made with after-tax dollars, meaning you pay taxes on the money twice (once when repaying and again at withdrawal in retirement).

2. 401(k) Hardship Withdrawal
Some employers allow hardship withdrawals for a first-time home purchase. Unlike a loan, this is not repaid, but there are significant downsides:

  • The withdrawal is subject to income tax.
  • If you’re under 59 and a half years old, you may face a 10 percent early withdrawal penalty.
  • You permanently reduce your retirement savings and potential future earnings.

Pros of a 401(k) Withdrawal:

  • No repayment required.
  • Provides immediate access to funds.

Cons of a 401(k) Withdrawal:

  • Subject to income tax and possible 10 percent penalty.
  • Permanently reduces retirement savings and potential long-term growth.
  • Could impact your financial security in retirement.

Is Using a 401(k) for a Down Payment a Good Idea?
While using a 401(k) loan may be a better option than a hardship withdrawal, both have significant drawbacks. Before making a decision, consider these factors:

Do You Have Other Options?

  • Explore low down payment mortgage programs like FHA (3.5 percent down), VA (0 percent down for eligible veterans), or conventional loans with 3 to 5 percent down.
  • Look into down payment assistance programs that may be available in your area.
  • Consider tapping into other savings (IRAs, Roth IRAs, or taxable investment accounts).

Can You Afford the Repayments?

  • A 401(k) loan reduces your take-home pay since repayments are deducted from your paycheck.
  • If you leave your job, you may have to repay the loan quickly or face taxes and penalties.

Will It Set You Back in Retirement?

  • Taking money out of your 401(k) can impact your long-term financial security.
  • If your employer offers 401(k) matching, ensure you’re still contributing enough to get the full match.

Alternatives to Using a 401(k) for a Down Payment

  • Save for a larger down payment over time.
  • Use a Roth IRA, which allows penalty-free withdrawals for first-time homebuyers.
  • Consider gift funds from family members, which are allowed on many loan types.
  • Look into down payment assistance programs available at the local or state level.

While using a 401(k) for a down payment is possible, it’s usually not the best financial move due to the risks to your retirement savings. If you do decide to use your 401(k), a loan is often preferable to a hardship withdrawal. Before making a decision, consult with a mortgage professional or financial advisor to explore all your options and ensure you’re making the best choice for both your homeownership and retirement goals.