ITIN loan: good or bad investment?
The first statement from a buyer when we are talking about an ITIN loan is: «the interest is very high» my answer is: «the interest is high comparing to a loan based on a social security for a technical reason», which I will explain you in detail.
A financial corporation lends to an individual without legal status in the country, which means that at any time the person can leave the country. Therefore, it is a loan with a higher risk, financial institutions measure the level of risk in each loan to determine the interest they offer you. This is the reason why the interest is higher. But so far, we have only talked about convenience for the bank. Now let’s talk about convenience for you.
First, how long have you been renting a place to live? No matter how long you have been renting, from month number one, we already know that money is being received by the landlord to accumulate capital or to pay the mortgage payment. This situation determines that you are paying for someone else’s home.
If your budget allows you to pay a certain amount of money for rent, let’s evaluate that budget to see if you can buy, then let’s look for properties that could supply your budget and needs at this time, remember the first house that you get, won’t be necessarily your dream home, but it will be the first step to achieving that dream home someday, if you continue paying rent, you are not getting close to that goal.
Second, the average price of a 2 or 3 bedroom home in Denver metro is $ 350,000 and $ 400,000 dollars. So, the approximate payment would be $ 2,300 with an ITIN loan and $ 2,185 with a traditional loan. We are seeing a difference of $ 115 dollars, if you realize, we can already see more precisely that the difference in the payment is not so significant due to the slightly higher interest. This will surprise you, let’s do one more calculation a 4% annual capital gain (which is very conservative in metro Denver) on a house of approximately $ 350,000, annually you will see a profit of $ 14,000. You can no longer limit yourself to thinking that paying $ 115 more per month is “Too much interest” because if you multiply $ 115 by 12 months the result is $ 1,380 that you “overpay” per year, but you are actually
earning $ 14,000.
Every day that goes by and you do not own your own house, you are losing money. Our team is trained to have an honest and productive conversation about your income, your budget and what you really want in a home to develop a plan that will be as unique as you are!
Call us and start dreaming about your new home. By the way, it is very easy to keep a POA (power of attorney) ready in case you have to leave the country, with that process we can also help you.
«We bought our first house with an ITIN loan more than 8 years ago, two years ago we sold it obtaining a significant sum to buy another twice bigger for our large family! Thanks to those earnings that we had, the payment did not change so much! Here we have our retirement savings. I do recommend buying with an ITIN loan».
Érika Estrada and family