Should I buy home without worrying about the un-certainty attached to H1B visa?
Buying house on H1B visa is a long term decision and depends highly on your base location/ City.
It may or may not be always be the best investment due to the high property taxes.
Some locations like Boston, New York City, and Bay area (in California) are extremely expensive to buy a house, but may be able to give you a profit when you sell your house.
But, other locations, like Dallas (Texas), Tampa (Florida), Raleigh (North Carolina) may not be fruitful as they all have land available to expand horizontally. More ground area is generally responsible for low price appreciation for housing market.
If you do not stay in the house for at-least 5 years, it would be really difficult to even break even the money you may have spent (think of maintenance, home insurance, property taxes, monthly EMI).
We are hearing a lot of people on H1B are a bit scared now to sign for Home Mortgage after recent USCIS policy changes to allow forceful deportation (NTA) and H4-EAD work permits being stopped (Almost confirmed).
You can buy house in USA with H1B visa by paying only 5% down payment.
Many people that we spoke to, have informed us that even though they are buying a new house and taking mortgage, they are only putting in 5% as down payment.
This too, when they can actually pay 20% and avoid the PMI insurance.
They are basically trying to keep as much money with them as they can, in the highly un-stable environment when your H-1B extension / Amendment or Transfer can be rejected without ever issuing an RFE!
You owe money to bank as long as you own the home. The visa denial does not relieve you from the responsibility of paying back the home loan in USA.
You have to keep paying the mortgage installment, home insurance, maintenance and property taxes even if your H1B extension is denied.
It does not matter how you pay it. Bank want their money back and government want their taxes.
If you have to go back to your native country immediately in case of H1B extension cancellation, there are not much options available to you. You have to follow the immigration law and leave the country immediately.
You can rent out the home even though you are not physically present in USA. This is allowed legally.
If you do NOT want to rent, then you should sell it unless you have enough savings to pay monthly bills to keep that house and keep paying monthly EMI.
You can use a power of attorney in favor of your friend or relative in USA to sell the house.
You can apply for B1/B2 visa with a reason to sell your property in USA.
That’s a legitimate purpose but, the visa may or may not be given based on the visa officer’s analysis of your case.
Your credit history will certainly take a big dip and you will have problems fixing it in future (if at all, you come back to USA on work visa).
Your house will be taken over and foreclosed by bank.
Is Short Selling House a Good Idea?
You may have to short sell the house at a much lower price if you want to leave the country quickly.
If, the H1B extensions are indeed cancelled sometime in future, there is a good chance that housing market will collapse.
You might just loose all the value if you have to go back.
Nevertheless, you can appoint an agent in USA (legally allowed) to arrange for tasks like initiate, conduct, or finalize the sale of property.
You do not have to be present in the United States physically.
The final sale agreement that need your signature can be sent to you wherever you might be (like India or China), and signed there and sent back to USA.
Buying house on H1B visa – Safe range?
After speaking to more people who are currently working on H1B visa, I have come to the conclusion that staying below 350k mark is a safe zone, if you really want to go ahead with buying decision.
Demand for houses above 350k mark normally goes up when economy is doing good but DROPS substantially after the economic downturn.
Selling, in case your visa extension gets rejected may result in losses.
So, it is advisable to stay within budget and controllable mortgage payments (like less than $2k per month) that you can easily manage even from your home country job.
Try to stay away from a future situation that may force you to short sell your house when you are not able to pay monthly property taxes + mortgage payment, as it is too high to support from your home job.
Do you have any experience to share? Your opinion is most welcome and appreciated in the comments section below.