How to Buy a House on OPT
Posted by Frank Gogol
Most F1 students on OPT in the U.S. dream of a long and fruitful life in America. One with a great job and maybe they might even own their own home. But what if OPT students could own that home now? Read on to learn more more about getting a mortgage as an OPT international student in the U.S.!
Table of Contents
What is Optional Practical Training?
Optional Practical Training (OPT) is temporary employment that is directly related to an F-1 student’s major area of study. F1 visa students can apply to receive up to 12 months of OPT employment authorization before completing their academic studies (known as pre-completion) and/or after completing their academic studies (known as post-completion).
The purpose of OPT is to offer international students on-the-job practical experience to carry forward with them to their future employment, whether it be in the U.S. or aboard.
Can Immigrants on an OPT Buy Homes in the U.S.?
A popular question for international students on OPT concerns their ability to purchase a home in the U.S. For many, the hoped-for trajectory is to complete their OPT and studies and then procure a job that will lead to an H1B visa and then, eventually, to a green card. And with these long-term goals in mind, many OPT international students want to know if they can buy a home in the U.S.
The answer is “yes”.
Any legal resident (visa holder or otherwise) of the U.S. is able to purchase a home. That said, it will be a more daunting process for an OPT international student than it would be for a proper U.S. citizen. Still, it is possible, and it’s a worthwhile investment.
Should OPT Students Buy Homes in the U.S.
As with every kind of major purchase, there are pros and cons to buying a home in the U.S. But in the case of an OPT student buying a home, the pros outweigh the cons. Some of the benefits, but not all, include:
- Having more agency of your living arrangements while in school
- Building equity, and therefore more buying and investing power later
- Getting significant tax benefits if you sell your home
These are just a few of the numerous perks that come with owning a home in the U.S. So, if you want to own a home in the U.S., how do you go about it?
How to Buy a Home on an OPT in the U.S.
The home buying process for immigrants, visa holders, and international students on OPT in the U.S. is more or less the same as it is for U.S. citizens. This process is well-documented in many other places, but at a glance, these are the steps:
- Determine how much you can afford to spend on a house
- Get Pre-approved for credit for your Mortgage
- Find the right Real Estate Agent
- Shop for a Home
- Make an Offer
- Get a Home Inspection
- Secure the Mortgage
- Obtain insurance and establish utilities
- Close the deal
But while it’s true that the process is pretty much identical for visa holders and U.S. citizens, it’s in the second step, involving securing a mortgage, that most international students on OPT, most visa holders in general, will have the most trouble.
The truth is, due to lack of credit history in the U.S. (and other factors that apply specifically to visa holders), OPT students will need to be smart about how they secure a mortgage in the U.S.
Is There Such a Thing as an OPT Mortgage Loan?
There are no mortgages designed specifically to be “OPT mortgage loans” in the U.S. That said there are options available to OPT international students.
Both FHA loans and mortgages from big banks are viable options for people on OPT who need a home loan, but these options are not without their difficulties for visa holders. You’ll be required to have a social security number, which not all immigrants have. You’ll also need a U.S. credit history and credit score, which, again, not all visa holders will have. Lastly, you’ll find that many lenders are risk-averse and that they find lending to visa holders, whose time in the U.S. is bound to their visa status, are high-risk.
Still, while it’s not possible to get a specifically OPT mortgage, there are options available to you. And, yes, it will be mor difficult for a visa holder to get a mortgage loan, there are ways to make yourself less of a risk to lenders and one of the ways to do that is with a strong down payment.
Getting a Personal Loan with Stilt to Help with Your OPT Mortgage
Even if you qualify for a mortgage in the U.S., there’s still the question of the down payment. Most mortgages require a down payment of around 20% of the total cost of the loan, which very few OPT international students are likely to be able to cover out-of-pocket.
So, what can an international student do?
Stilt is an online lender designed to help visa holders acquire competitive, low-interest loans without a credit history in the U.S. The Still loan process is very simple:
The begin, simply fill out the online application. You’ll be asked for some basic loan information, like name, employment, visa status, and so on. Once you’ve completed the application, you’ll submit it and the Stilt team will send you a decision within one business day.
If your application is approved, you’ll be asked to upload some additional information and documents. Once these documents are reviewed and verified, your loan will be disbursed.
The whole borrowing process with Stilt can take just a couple of days if documents are provided upon request.
Start Making Payments
Your loan will be disbursed directly to your bank account and can be immediately used to pay the down payment on your OPT mortgage loan! It’s that simple.
Repayment of your Stilt loan will begin one month after disbursal, by which time you might already be moved into your new home!
The Wrap Up
If you’re an OPT international student in the U.S. and you’re planning (or hoping, at least) for a long future in the U.S., it absolutely makes sense to invest in owning your own home.
And while there’s no such thing as an “OPT mortgage loan”, there are plenty of options available to you as an international student on OPT.
Your chances of owning a home will be even greater if you can make a sizable down payment on your mortgage. But luckily, there are companies like Stilt to help increase your chances of securing a home loan.
So, what are you waiting for? Get started today!