How to Get an ITIN Loan

As an immigrant living in the United States of America, or as a nonresident, you might have come across the term ITIN when you start earning enough to pay taxes. So, what is an ITIN number? And can it help you take out a loan? Let’s find out!

What is an ITIN Loan?

Believing that homeownership is unattainable because you lack a social security number? There’s hope for you. The financial market offers various programs assisting individuals without Social Security numbers in securing mortgages, and the ITIN mortgage is one such option.

An ITIN loan is tailored for individuals possessing a tax ID but not a social security number. It’s a viable solution for those looking to buy a home but may lack some of the conventional documentation. Furthermore, ITIN mortgage loans can serve as an alternative proof for those seeking mortgages or other loans.

For those considering ITIN loans, here are some essential points to remember:

• Multiple lenders offer ITIN loans.
• The interest rates for ITIN loans might be higher than their traditional counterparts.
• Qualifying for an ITIN loan might necessitate extra documentation.

Should you find the ITIN loan appealing, it’s advisable to consult your lender about its feasibility and if it aligns with your requirements.

Key Features of ITIN Loans

• Applicable for both property purchases and refinances.
• Suitable for both primary residences and investment properties.
• A minimum down payment of 20% is mandated (accepting gift funds).
• Documentation includes 2 years of tax returns, 2 years of W2s or 1099s, and the latest 3 months of bank statements.
• Identification requirements encompass a passport, ITIN card, and driver’s license.
• ITIN loans are an excellent alternative for individuals who might not meet the criteria for conventional loans.

How Do ITIN Loans Work?

ITIN mortgages function in much the same way as standard mortgages. For instance, those interested in securing an ITIN loan can apply either online or in person, providing essential financial details such as income and regular expenses.

However, a key distinction lies in the realm of documentation. Unlike conforming mortgages that adhere to stringent documentation benchmarks, ITIN mortgages fall within the non-qualified mortgage, or non-QM, category. This essentially means that while qualified mortgages are structured to ensure safety for the borrower, non-QM loans might lack these protective features.

This absence of certain safeguards renders non-QM loans a tad riskier for lenders. As a result, these loans may carry a higher price tag for borrowers. However, when juxtaposed with other alternatives like owner financing or unconventional mortgage options, ITIN loans might present a more economical choice.

A Note on Interest Rates

It’s important to note that the interest rates for ITIN loans are generally higher than those for conforming mortgages. Yet, their affordability can vary based on individual borrower circumstances. Furthermore, some lenders, in their bid to make these loans more attractive, offer special discounts or incentives. These can range from temporary rate reductions to credits, potentially easing the immediate financial burden during the closing phase of the loan.

How to Qualify for an ITIN Loan

The process of applying for a loan can seem overwhelming, particularly if you’re navigating through the requirements for the first time. However, if you hold an Individual Taxpayer Identification Number (ITIN), you’re not without options. Here’s what you need to be eligible for an ITIN loan:

1. Down Payment: Be prepared to make a down payment of at least 15% on the property you’re interested in. Your exact down payment might vary based on your credit score.
2. Tax Returns: Ensure you’ve filed tax returns for at least two consecutive years using your ITIN.
3. Work History: You should either have a consistent two-year employment history in the same field or have been self-employed for the same duration.
4. Recent Pay Stubs: Present pay stubs from the last 30 days to verify your current employment.
5. Credit Score: Ideally, a credit score of 600 or above is recommended. However, having no credit score doesn’t necessarily disqualify you from obtaining an ITIN loan.

Although the journey might appear challenging, partnering with a proficient lender can simplify the path. So, even if you don’t possess a Social Security number, homeownership might still be within your reach.

How to Get an ITIN Loan

While not all mortgage lenders offer ITIN loans, there are reputable options available, such as Guild Mortgage and Angel Oak Mortgage Solutions. If you’re considering an ITIN loan, follow these steps:

1. Research Lenders: Start by identifying lenders that specialize in ITIN loans. Guild Mortgage and Angel Oak Mortgage Solutions are two notable options.
2. Check Credit Score Requirements:
   • Guild Mortgage: Requires a minimum credit score of 660.
   • Angel Oak Mortgage Solutions: Also requires a credit score of 660.
3. Determine Down Payment Needs:
   • Guild Mortgage: Expect a down payment of 20%.
   • Angel Oak: A slightly higher down payment of 25% is necessary.
4. Visit Lender Websites: Some lenders may not clearly advertise their non-QM or ITIN loan options online.
5. Contact Lenders Directly: Proactively reach out to your chosen or preferred lenders to inquire about ITIN loan options and any hidden offerings they might have.

Remember, direct communication can often unveil more accommodating options tailored to your specific situation.

Which Kinds of Properties Are Eligible for ITIN Loans?

For those considering an ITIN mortgage, a wide variety of properties are eligible as long as the property serves as your primary residence. These include:

• Single-family homes
• Condominiums
• Townhouses
• Residential buildings with 2-4 units

Additionally, if you have aspirations of purchasing a secondary home or a rental property, financing options are available to assist you.

Are Self-Employed Workers Eligible for ITIN Loans?

Being self-employed doesn’t bar you from obtaining an ITIN loan. In fact, ITIN loans can be particularly beneficial for self-employed individuals who might find traditional financing inaccessible.

To qualify, you should:

• Have at least two years of self-employment.
• Alternatively, be an independent contractor receiving a 1099 form.

While tax returns aren’t mandatory, it’s essential to furnish 12 months’ worth of bank statements to validate deposits. These records are pivotal in illustrating income on your ITIN mortgage application.

11 Tips for Immigrants to Boost ITIN Loan Approval Chances

As a newcomer to the US, you’ll be at a disadvantage in the lending space. That doesn’t mean you can’t improve your chances for ITIN loan approval, though. Here are some tips to help you get approved:

1. Build Credit Early: Start with secured credit cards or newcomer-friendly loans.
2. Maintain Steady Employment: Consistent income reassures lenders.
3. Save for a Hefty Down Payment: Demonstrates financial commitment.
4. Limit Debts: A lower debt-to-income ratio is appealing to lenders.
5. Organize Key Documents: Have your visa, passport, ITIN card, and employment verification ready.
6. Show Stable Residence: Living at one address for a long duration indicates stability.
7. Consider a Co-signer: A reliable co-signer can strengthen your application.
8. Establish a Bank Relationship: Demonstrates financial stability.
9. Stay Updated: Be aware of any changes in ITIN loan policies.
10. Consult Experts: Seek guidance from financial advisors familiar with ITIN loans.
11. Be Transparent: Provide accurate and honest information.

Read More

• Guide to ITIN Home Loans
• How to Get an Auto Loan with ITIN Number
• How to Get a Personal Loan with ITIN Number

Final Thoughts

An ITIN number will help you manage your finances in the U.S. It helps in opening a bank account, creating your credit history, paying taxes, applying for a driver’s license, and obtaining loans and credit cards. It is highly recommended that you get yourself an ITIN number as soon as possible if you plan to live in the U.S.

ITIN Loan FAQ

Below, you will find some common questions around getting a loan with an ITIN and their answers.

What is an ITIN loan program?

An ITIN loan program is designed to help those with an Individual Taxpayer Identification Number (ITIN) secure financing, especially when they don’t have a Social Security number.

What is the down payment required for an ITIN home loan?

The down payment for an ITIN home loan can vary based on the lender, but typical requirements range from 15% to 25%.

Does Bank of America do loans with an ITIN?

It’s best to contact Bank of America directly or check their current loan policies, as offerings and criteria can change over time.

Can you finance a car with an ITIN?

Yes, many auto dealerships and lenders allow financing with an ITIN, though terms and conditions might differ.

How can I get a loan in the USA without an SSN?

One common way is through ITIN loan programs. These are designed for individuals without a Social Security number but who possess an ITIN.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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