For many people, owning property in the United States is exciting and attractive. The country has incredible diversity: from the sunny beaches of Florida and California to the bustling metropolises of New York and Chicago.  

But, owning a piece of the American dream comes with a price – literally. So, in this article, we’ll examine what you need to know about saving up for a property in the USA.

Getting the down payment down

The first thing to consider when looking at your savings budget is the down payment. The concept of a "down payment" is commonplace around the world. This is an initial, upfront payment made when purchasing a high-value item, such as a house or a car. 

Down payments secure the purchase and reduce the amount of money that needs to be financed through a loan. Typically, these range from 3% to 20% of the property's purchase price, depending on various factors, and the amount is paid in cash at the time of the transaction. 

However, saving up the substantial amount of money needed to purchase property in the United States, especially as a foreign buyer, requires careful financial planning and discipline. 

For US citizens, typical wisdom holds that a 20% down payment is the ideal amount, so when planning to buy a home worth $300,000, one would aim to save at least $60,000 for a 20% down payment. 

But, for foreign buyers, most US banks and lenders will require a minimum down payment of 30% of the purchase price – sometimes even higher. This is because they view loans to non-US residents as higher risk; this means that you’d instead need to save $90,000 as the magic down payment number for the property above.

Financing the dream: the mortgage 

As we’ve seen, buying foreign buyers will have to be a bit more strategic when planning; they often face different financing regulations when compared to US citizens. And beyond the down payment, you’ll also have to consider the rest of the cost – the mortgage itself.

It’s worth mentioning that while some US banks and lenders may offer mortgages to non-residents, they often come with higher interest rates and larger down payment requirements.

That said, there are other options here: some international banks with branches in the US may provide mortgage services to their clients. Additionally, you can try to look for local lenders who specialize in working with foreign buyers.

Saving your savings

It can seem absolutely daunting to buy real estate in the USA as a foreign national: the costs can be higher, and securing financing can be tougher. But as they say in America: “where there’s a will – there’s a way”. You can do it! Working with a specialized real estate organization can help you work out your way forward, and can be an excellent move. 

Besides that, a lot of techniques for maximizing your savings potential are applicable across the globe – let’s look at some of those next.

#1 Reduce your debt
Debt and interest can be a real drag on your ability to effectively save. So, focus on paying down any high-interest debts, like credit card balances and personal loans, as soon as possible.

#2 Slash discretionary spending
Sacrifices now can mean awesome rewards later: examine your current spending habits very closely and identify opportunities to reduce (or eliminate) discretionary purchases. 
Some common things to look for: eating out, entertainment, clothing, travel, and subscriptions are common areas where you can cut back. A good thorough look is in order, as some of these charges can be quite sneaky! 
Once you’ve got everything in line, redirect those funds into your US real estate savings fund instead.

#3 Downsize your lifestyle
Where are you living now? If you already have a primary residence, is it possible to sell it and move to a smaller, less expensive home? You might be able to use the proceeds from the sale to supercharge your US property savings and accelerate the process.

#4 Boost your income
This one may seem obvious, but by combining several savings techniques with an increased income, you’ll put yourself on the fast track to your new home.

Look for ways to increase your earnings. Can you aim for a raise at work or take on additional hours? Another option is to start a side hustle or freelance gig, and then allocate that income directly to your savings fund.

#5 Implement an automatic savings regime
Owning a home in the US is a big goal, so a consistent approach and some smart strategies are going to be needed in order to meet those goals. Therefore, if possible, set up automatic transfers to move a portion of your pay into a savings account. By paying yourself first, you remove any temptation to spend those funds elsewhere.

#6 Monitor exchange rates
As a foreign buyer, exchange rates can significantly impact your purchasing power. Keep an eye on currency fluctuations and consider converting your money when rates are favorable. Additionally, depending on your home country, you may want to consider keeping your savings in US dollars. And on that note, let’s move on to our final point.

#7 Obtain a US bank account
Setting up a US bank account can facilitate the transaction process later on and make it easier to manage your property. It also helps to establish a financial presence in the country, which can be beneficial for future financial activities. Plus, if you want to buy a home here, it’ll just feel good to get this part out of the way!

This is a very complex process, and these things take time, but by thinking through everything step by step, formulating a disciplined savings strategy, and surrounding yourself with a knowledgeable team (like real estate professionals and financial advisors) you can smartly and effectively make your dreams a reality!